reported a fourth-quarter loss of nearly $700 million on Thursday, thanks to the ongoing strike in Southern California, a huge goodwill charge and increasing costs.
In its 17-week quarter ended Jan. 3, the grocery chain lost $695.9 million, or $1.57 a share, on $10.98 billion in sales. The poor results were still an improvement vs. the fourth quarter last year, when the company lost $1.05 billion, or $2.37 a share, on sales of $10.70 billion.
Safeway estimated that about $102.9 million, or 23 cents a share, of its loss was due to the strike. The writedown of goodwill related to its Randall's and Dominick's chains, and other noncash charges depressed Safeway's bottom line another $888.6 million, or about $2 a share.
Setting aside the goodwill and noncash charges, Safeway would have earned about 43 cents a share. Without the strike impact as well, the company would have earned 66 cents a share.
That latter result met the low end of the company's guided range of 66 cents to 69 cents a share. Analysts surveyed by
MultexNet service were expecting the company to earn 64 cents a share, excluding charges, on $10.76 billion in sales.
But in a sign that could be viewed negatively on Wall Street, Safeway withdrew its previous guidance for fiscal 2004 and declined to update that guidance, saying that it couldn't estimate the effects of the strike. Previously, the company had forecast that it would earn $1.95 to $2.03 a share this year, excluding the effect of the strike. Analysts have forecast earnings of $1.99 a share on $35.44 billion in sales.
At least in the short term, investors brushed off the withdrawal of the company's guidance. In recent trading, Safeway shares were up $1.10, or 5.1%, to $22.89.