Grocery-store operator Safeway Inc. said Thursday the stronger dollar, lower fuel prices and weak consumer spending caused its first-quarter profit to fall 25 percent.
The company also lowered its full-year outlook due to the weak environment but raised its dividend.
Profit for the three months ended March 28 fell 25 percent to $144.2 million, or 34 cents per share, from $193.4 million, or 44 cents per share last year. That is below the 40 cents per share analysts polled by Thomson Reuters, on average, predicted.
Revenue fell 8 percent to $9.24 billion, while analysts expected revenue of $9.86 billion.
Sales fell mainly due to lower fuel prices and the stronger dollar's detrimental effect on Canadian operations.
Sales in stores open at least one year fell 0.7 percent, excluding fuel sales.
Safeway said it continues to offer low "everyday" prices as consumers cut spending, and the number of sales transactions increased during the quarter.
The company now expects earnings of $2.10 to $2.30 per share in 2009 from previous guidance of $2.34 and $2.44 per share. Analysts expect $2.23 per share. The company also cut capital spending to $1 billion from $1.2 billion.
Safeway is raising its dividend from about 8 cents to 10 cents, payable July 16 to shareholders of record as of June 25.
In morning trading, Safeway shares fell $1.42, or 6.7 percent, to $19.79.