Grocery chain Safeway reported a 12% increase in third-quarter earnings this morning, as profits rose to $194.6 million, or 44 cents per share, compared to the year-ago results of $173.5 million, or 39 cents per share. The per-share profit figure falls right in line with analysts' expectations. Meanwhile, revenue gained nearly 4% to $9.78 billion.

Safeway also affirmed its full-year earnings outlook for a per-share profit of $1.95 to $2.00 per share.

The shares have ticked 1.5% lower out of the gate this morning. The stock has been locked in a sideways channel since September 20, ricocheting between the 32.50 and 34 levels. SWY's trading range has been defined by its overhead 20-week moving average and its supportive 10-week trendline.

Investors are showing a definite pessimistic slant toward Safeway. Its Schaeffer's put/call open interest ratio checks in at 0.83, just 6 percentage points away from an annual peak. Meanwhile, short interest represents more than 4% of the stock's available float. At SWY's average daily volume, it would take 5 days for all the existing shorted shares to be repurchased but it doesn't seem as though these bears are feeling any pressure just yet.