) is set to report fourth quarter and full year 2012 results on
Feb 21. Last quarter, this food and drug retailer posted a
positive earnings surprise of 7.14%. Let's see how things are
shaping up prior to the announcement.
Safeway's Growth Profile in the Last Quarter
The company was affected by a slowdown in identical-store
sales (excluding fuel) and lower Canadian exchange rate in the
third quarter. Larger-than-expected weakening in price inflation
influenced identical-store sales. However, volume trends are
expected to improve with easing of inflation. Further, its "Just
for U" loyalty program posted an encouraging performance.
Safeway also witnessed margin contraction due to higher
expenses related to the launch of its loyalty program and change
in sales mix in the last reported quarter. Notably, the company
has undertaken cost saving initiatives to brace margin
Our proven model does not conclusively suggest that Safeway is
likely to beat earnings estimate this quarter. This is because a
stock needs to have a positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) as well as a Zacks Rank #1, 2 or 3 for this to happen. This,
however, is not the case for Safeway as seen below:
Zacks Earnings ESP:
The Most Accurate Estimate stands at $0.76 and the Zacks
Consensus Estimate is also pegged at $0.76. This comes to a
difference of 0.00%.
Zacks Rank #3 (Hold):
Safeway carries a Zacks Rank #3 which lowers the predictive power
of ESP. The Zacks Rank #3 along with earnings ESP of 0.00% makes
the surprise prediction difficult.
Other Stocks to Consider
Here are some other companies that may be considered as our
model shows they have the right ingredients to post an earnings
beat this quarter:
Abercrombie & Fitch
), Earnings ESP of 1.04% and Zacks Rank #1 (Strong Buy)
), Earnings ESP of 2.90% and Zacks Rank #2 (Buy)
), Earnings ESP of 2.11% and Zacks Rank #3 (Hold).
ABERCROMBIE (ANF): Free Stock Analysis Report
KROGER CO (KR): Free Stock Analysis Report
SAFEWAY INC (SWY): Free Stock Analysis Report
WALGREEN CO (WAG): Free Stock Analysis Report
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