Safeway Earnings Shoot Up 37 Percent

Safeway Inc. reported a 37 percent gain in third-quarter results Thursday, a strong showing that will enable the leading grocery chain to expand and improve its network of 1,057 stores.

The Oakland-based company earned $83.7 million, or 69 cents a share, up from $61 million, or 50 cents a share, in the year-earlier quarter. Sales totaled $3.8 billion vs. $3.6 billion, up 5.9 percent.

Safeway’s results exceeded Wall Street expectations. The company’s shares rose $1.12-1/2 to $41.62-1/2 on the New York Stock Exchange.

The earnings improvement will help the company accelerate spending on new and remodeled stores, said President Steve Burd.

Safeway’s share of earnings from unconsolidated affiliate Vons’ increased to $4.8 million, up from $1.3 million the same quarter a year earlier.

Earnings from unconsolidated affiliate Casa Ley in Mexico also improved, to $4.6 million from $3.1 million, Safeway said.

The company plans to spend about $475 million this year to open 30 stores and remodel another 100. Safeway intends to increase capital expenditures to about $550 million next year.