Is Safeway a Buy After Recent News?
T = Trends for a Stock’s Movement
Safeway is a food and drug retailer in North America that operates over 1600 stores. The company’s United States retail operations are located principally in California, Hawaii, Oregon, Washington, Alaska, Colorado, Arizona, Texas, the Chicago metropolitan area, and the Mid-Atlantic region. In support of its retail operations, Safeway has a network of distribution, manufacturing, and food processing facilities. Safeway also owns and operates GroceryWorks.com, an online grocery channel doing business under the names Safeway.com and Vons.com. Safeway also has a 49 percent interest in Casa Ley, S.A. de C.V., which operates 195 food and general merchandise stores in Western Mexico.
Safeway shares are up despite the fact that the grocery store chain reported a 59 percent drop in profit for the third quarter. The reason for the Safeway optimism is that the company announced it’s leaving Chicago by the beginning of next year. The 72 Domenick’s supermarkets it owns in the city will give Safeway a $400 to $450 million cash tax benefit. Revenue grew 1.1 percent to $8.6 billion, but earnings fell short of estimates at 10 cents a share.