third-quarter profit jumped 41% as higher sales offset declining margins.
The grocer said Thursday that its earnings rose to $173.5 million, or 39 cents a share, from $122.5 million, or 27 cents a share, a year earlier. The earnings matched the average estimate of analysts polled by Thomson First Call.
Sales rose to $9.42 billion from $8.95 billion, while same-store sales jumped 5%. Wall Street expected sales of $9.35 billion.
Safeway's gross margin declined to 28.3% from 28.58% as higher fuel sales --which have lower margins -- hurt profits. The company also said margins were affected by investments in price and advertising.
Safeway said it is comfortable with analysts' current earnings forecast of $1.72 a share. The company also slightly boosted its forecast for identical-store sales, excluding fuel, to 3.1% to 3.3% from a prior view of 3.0%.