Safeway Profit Plunges 58% in 3rd Quarter

Safeway Stores on Friday reported that its third-quarter earnings dropped by 58%, primarily because of a one-time gain last year and charges in the latest quarter.

The 2,324-store grocery chain said it earned $37.5 million in the quarter that ended Sept. 9, compared to $89.1 million in the year-earlier period.

The company said the decline largely resulted from the combination of a $27-million expense related to its acquisition by Kohlberg Kravis Roberts Co. and a $50-million pretax gain realized in the third quarter last year from the sale of some foreign operations.

Without those items, third-quarter pretax earnings would have been $54.5 million, compared to $54.2 million in the third quarter last year.

Third-quarter revenue totaled $4.6 billion, 2.1% more than the $4.6 billion in 1985.

Officials of the Oakland-based company said the third-quarter results reflected improved foreign operations, while domestic operations “were relatively even in comparison with 1985.”

Consolidated net income for the first three quarters of 1986 totaled $110.1 million, compared to $129 million for the same period last year. This excludes the gains on sales of the foreign holdings.