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Despite Q3 decline, Safeway sees ident-store growth in Q4

Safeway reported income from continuing operations of $108 million, or 45 cents per diluted share, for the third quarter of 2012 compared with $130.3 million (38 centper diluted share) in the third quarter of 2011.

The company reported that sales for the quarter declined 0.2% to $10 billion from $10.1 billion for the same period last year. The decline was mainly due to the disposition of Genuardi's stores and a lower Canadian exchange rate, partly offset by higher fuel sales, the company said. Identical-store sales, excluding fuel, were 0.1% for the quarter, which were lower than anticipated primarily due to a larger than expected decline in price inflation, partly offset by continued improvement in volume, according to Safeway.

"We are encouraged that in the fourth quarter to date our identical-store sales, excluding fuel, are running at 1% with slightly improved volumes and higher inflation than in the third quarter of 2012," said Steve Burd, chairman and CEO. "We expect identical-store sales in the fourth quarter will be driven by increased just for U engagement, the roll out of our partner fuel loyalty program and the launch of our wellness initiative."

Safeway is maintaining its 2012 earnings guidance of between $1.90 to $2.10 per diluted share.