Safeway Earnings Up 14.5 Percent

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Safeway Inc. on Friday said its third-quarter earnings rose 14.5 percent, as total sales gained on the acquisition of the Genuardi's chain and new store openings.

The No. 3 U.S. grocery chain also said it increased it stock buyback program.

Safeway, which operates 1,759 stores including Safeway, Vons and Dominick's, said it earned $309.2 million, or 60 cents a share, in the period ended Sept. 8, compared with $270 million, or 53 cents, in the year-ago period.

The company matched the analysts' mean estimate of 60 cents per share, within a range of 59 cents to 61 cents, according to research firm Thomson Financial/First Call.

Safeway shares gained 99 cents to $39.49 Friday in New York Stock Exchange trade.

Sales at stores open at least a year -- or same-store sales, a key measure of retail performance -- gained 1.6 percent during the quarter, Safeway said.

Total sales increased to $8.0 billion from $7.5 billion last year, helped by contributions from its February acquisition of Norristown, Pennsylvania-based Genuardi's, as well as new store openings and higher sales at continuing stores.

The Pleasanton, California-based company said it increased its share buyback program by $500 million to $1.5 billion. Safeway said it repurchased 4.6 million shares for $191.1 million in the quarter.

``Current market conditions provide an excellent opportunity for us to buy back our shares,'' said Chairman and Chief Executive Steve Burd.

Shares of Safeway have slid about 35 percent since the beginning of the year, underperforming the broad-based Standard & Poor's 500 index, which has fallen 23 percent during that same period.