Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Business
Classified Sites

The Canadian Press - ONLINE EDITION

Safeway in talks over possible sale of company; 4th-quarter sales miss expectations

FILE - In this photo made, June 21, 2010 file photo, Red Bull and other drinks are on display at a Safeway in San Ramon, Calif. National grocery operator Safeway Inc. reports quarterly earnings on Feb. 19, 2014. (AP Photo/Paul Sakuma)

Enlarge Image

FILE - In this photo made, June 21, 2010 file photo, Red Bull and other drinks are on display at a Safeway in San Ramon, Calif. National grocery operator Safeway Inc. reports quarterly earnings on Feb. 19, 2014. (AP Photo/Paul Sakuma)

NEW YORK, N.Y. - Safeway says it's in talks to possibly put itself up for sale.

The Pleasanton, Calif.-based supermarket operator said Wednesday that discussions are ongoing but that it hasn't yet reached an agreement on a transaction. It added that it isn't certain the talks will end in a deal.

The company says it's postponing its annual investor conference that had been scheduled for early March as a result of the developments.

Safeway, which also operates Vons stores and has more than 1,300 U.S. locations, has been trying to adapt to a changing supermarket industry, with people increasingly doing their shopping at big-box stores like Target, drug stores and even dollar stores. This past September, the company disclosed that it adopted a "poison pill" plan to prevent a hostile takeover. That move came as activist hedge fund Jana Partners had amassed a significant amount of Safeway's stock. Jana Partners had said it talked with the company about strategic alternatives, such as exiting regions that aren't profitable.

Safeway's disclosure came as the company reported a quarterly profit that beat Wall Street expectations, although sales fell short of expectations. Investors sent the stock up almost 4 per cent to $35.90 in after-hours trading.

The company also said it would distribute the remaining shares it owns of Blackhawk Network Holdings to Safeway shareholders. Safeway took the gift and prepaid card unit public in March and still owns about 72.2 per cent of Blackhawk. If it closes on a deal, Safeway said the distribution may be taxable. It also said it was considering alternatives including a sale for its 49 per cent stake in Casa Ley S.A. de C.V., a food and general merchandise retailer in Mexico.

For three months ended Dec. 28, Safeway earned $3.31 billion, or $13.46 per share. Excluding various one-time items, it earned 53 cents per share, above the 47 cents per share Wall Street expected. The results in the latest quarter were boosted by more than $3 billion from discontinued operations — the Canadian stores it sold during the quarter.

A year earlier, Safeway earned $244 million or $1.02 per share.

Revenue rose less than 1 per cent to $11.31 billion, short of the $11.49 billion analysts expected.

Sales at established locations, a key indicator of health, rose 1.6 per cent in the quarter.

Looking ahead to 2014, the company said it expects sales at established locations to rise 1.5 per cent to 2.5 per cent. Earnings per share are expected to be $1.15 to $1.35 per share, versus the $1.66 per share analysts expect.

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on brandonsun.com. You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

Comment
  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.

letters

Make text: Larger | Smaller

Brandon Sun Business Directory
Submit a Random Act of Kindness
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates