SUPERVALU Reports Record First Quarter Fiscal 2009 Earnings

Updates Fiscal 2009 Guidance
MINNEAPOLIS--(Business Wire)--
SUPERVALU INC. (NYSE: SVU) today reported sales and earnings for
the first quarter of fiscal 2009. The company reported first quarter
net sales of $13.3 billion compared to $13.3 billion last year, record
net earnings of $162 million, an increase of 9 percent compared to
$148 million last year, and record diluted earnings per share of
$0.76, an increase of 10 percent compared to $0.69 last year. First
quarter fiscal 2009 and first quarter fiscal 2008 results also
included after-tax charges for one-time acquisition-related costs of
$6 million and $17 million, respectively, or $0.03 and $0.08 per
diluted share, respectively.

Jeff Noddle, SUPERVALU chairman and chief executive officer said,
"While we are pleased with our record results and the continued
progress of the Albertsons integration, the ongoing weakness in the
economy combined with higher food and energy inflation has created
conditions that make us take a more cautious view for the balance of
the fiscal year. In light of the macroeconomic environment, we have
updated our guidance and are responding with tighter expense controls
and other cost-savings activities. We remain confident that we are
doing the right things for the long-term health of our business and
are effectively managing those factors under our control in order to
create a foundation for sales momentum and future growth."

First Quarter Results

First quarter retail food net sales were $10.3 billion compared to
$10.4 billion last year, a decrease of 0.7 percent, primarily
reflecting the impact of store closures and identical store sales of
negative 0.9 percent, excluding fuel, primarily as a result of soft
sales and higher levels of competitive openings. Retail square footage
increased 0.1 percent from the first quarter of fiscal 2008, with new
store openings offset by the previously announced closure of
underperforming stores. When excluding store closures, total retail
square footage increased 2.5 percent from the first quarter of fiscal
2008.

First quarter supply chain services net sales were $3.0 billion
compared to $2.9 billion last year, an increase of 4.6 percent,
primarily reflecting the pass through of inflation, new business
growth and lower than normal customer attrition.

The company's business segment mix changed slightly in the first
quarter this year compared to last year. Retail food net sales in the
first quarter of fiscal 2009 represented 77.5 percent of total net
sales compared to 78.4 percent last year. Supply chain services net
sales in the first quarter of fiscal 2009 represented 22.5 percent of
total net sales compared to 21.6 percent last year.

Gross profit margin in the first quarter decreased 20 basis points
as a percent of net sales to 23.0 percent, primarily related to the
change in business segment mix.

Selling and administrative expenses in the first quarter decreased
10 basis points as a percent of net sales to 19.6 percent, primarily
reflecting a 20 basis point favorable impact from the business segment
mix change.

Reported operating earnings for the first quarter were $456
million, or 3.4 percent of net sales compared to $466 million, or 3.5
percent of net sales last year. Retail food operating earnings were
$399 million, or 3.9 percent of net sales, compared with $449 million,
or 4.3 percent of net sales last year, primarily reflecting the impact
of soft sales and investments in price as well as higher energy costs
and a LIFO charge partially offset by lower employee related costs and
synergies from the Albertsons acquisition. Supply chain services
operating earnings were $86 million, or 2.9 percent of sales, compared
with $67 million, or 2.3 percent of sales last year primarily
reflecting improved sales leverage.

Net interest expense for the first quarter was $190 million
compared to $223 million last year reflecting lower borrowing levels
and interest rates.

SUPERVALU's income tax expense was $104 million, or 39.0 percent
of pre-tax income in the first quarter of fiscal 2009, compared to $95
million, or 39.0 percent of pre-tax income in the first quarter last
year. The effective tax rate for fiscal 2008 was 39.3 percent.

Capital spending for the first quarter was $338 million, including
approximately $1 million in capital leases. In the first quarter, the
company completed 43 major remodels, 1 minor remodel and 7 new stores.
Capital spending primarily included store remodeling activity, new
retail stores and technology expenditures.

Total debt to capital was 59 percent at quarter end compared to 60
percent at fiscal 2008 year-end. The total debt to capital ratio is
calculated as total debt, which includes current and long-term debt
and obligations under capital leases, divided by the sum of total debt
and total stockholders' equity.

Diluted weighted-average shares outstanding for the first quarter
were 214 million shares compared to 216 million shares last year. As
of June 14, 2008, SUPERVALU had 212 million shares outstanding.

Fiscal 2009 Guidance

Based on the current economic environment and despite actions the
company is taking to mitigate the slowdown in consumer spending, the
company is updating its fiscal 2009 guidance. Earnings are now
expected to be in the range of $3.00 to $3.16 per diluted share on a
GAAP basis and $3.04 to $3.20 on an adjusted basis when excluding
one-time acquisition-related costs. Identical stores sales growth,
excluding fuel, is now projected to be approximately 0.5 percent
compared to previous guidance of 1.0 to 2.0 percent. These revisions
reflect higher energy costs, higher non-cash LIFO charges and the
effect of the economy on consumers, partially offset by tighter
expense controls and other mitigating activities.

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Fiscal 2009
----------------------------------
Diluted Earnings Per Share Summary
Updated Guidance Previous
Guidance
----------------------------------------------------------------------
Diluted earnings per share on a $3.00 to $3.16 $3.06 to $3.22
GAAP basis
One-time acquisition-related costs $0.04 $0.04 to $0.03
Diluted earnings per share before $3.04 to $3.20 $3.10 to $3.25
one-time costs
----------------------------------------------------------------------
Weighted-average diluted shares 214 to 216 215 to 217
outstanding (millions)
*T

SUPERVALU's fiscal 2009 guidance includes the following
assumptions:

-- Net sales are estimated to be approximately $45 billion,
including an approximate benefit of $800 million from the 53rd
week in the fiscal year;

-- Diluted earnings per share will benefit approximately $0.06
from the 53rd week;

-- Identical store sales growth, excluding fuel, is projected to
be approximately 0.5 percent;

-- Sales attrition in the traditional food distribution business
will be approximately 2 to 4 percent for the year. This rate
is exclusive of new business and the multi-year migration of
Target Corporation volume to self distribution;

-- Consumer spending will continue to be pressured by inflation
and the economy;

-- Capital spending is projected to be approximately $1.3
billion, which includes 165 major store remodels,
approximately 15 new traditional supermarkets and 55 to 65
limited assortment stores, including 30 licensed stores;

-- Debt reduction is estimated to be $400 million;

-- Incremental synergy benefits in fiscal 2009, relating to the
Albertsons acquisition, are estimated to be approximately $40
to $50 million pre-tax;

-- One-time acquisition-related costs are expected to be
approximately $16 million pre-tax in fiscal 2009; and

-- The effective tax rate is estimated to be approximately 39
percent.

A conference call to review the first quarter results is scheduled
for today at 9:00 a.m. (CDT). A live Web cast of the call will be
available at http://investor.supervalu.com. An archive of the call is
accessible via telephone by dialing (706) 645-9291 with passcode
55810348 and through the company's Web site at www.supervalu.com. The
conference call archive will be available through August 8, 2008.

About SUPERVALU INC

SUPERVALU INC. is one of the largest companies in the United
States grocery channel with estimated annual sales of $45 billion.
SUPERVALU holds leading market share positions across the U.S. with
its approximately 2,475 retail grocery locations. Through SUPERVALU's
nationwide supply chain network, the company provides distribution and
related logistics support services to more than 5,000 grocery
endpoints across the country. SUPERVALU currently has approximately
192,000 employees. For more information about SUPERVALU visit
www.supervalu.com.

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR
THE PURPOSE OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995

Except for the historical and factual information contained
herein, the matters set forth in this news release, particularly those
pertaining to SUPERVALU's expectations or future operating results,
statements as to the progress and expected benefits of the combination
of the operations of Albertson's, Inc. that were acquired in June 2006
with those of SUPERVALU, such as efficiencies, cost savings,
synergies, market profile and financial strength, and the competitive
ability and position of the combined company, and other statements
identified by words such as "estimates," "expects," "projects,"
"plans," and similar expressions are forward-looking statements within
the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to
differ materially, including the impact of economic and industry
conditions, competition, security and food and drug safety issues, the
integration of Albertsons operations, store expansion and remodeling,
liquidity, labor relations issues, escalating costs of providing
employee benefits, regulatory matters, self insurance, legal and
administrative proceedings, information technology, security, severe
weather, natural disasters and adverse climate changes continued
provision of transition support services and accounting matters and
other risk factors relating to our business or industry as detailed
from time to time in SUPERVALU's reports filed with the SEC. You
should not place undue reliance on these forward-looking statements,
which speak only as of the date of this news release. Unless legally
required, SUPERVALU undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.

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SUPERVALU INC. and Subsidiaries
CONSOLIDATED COMPOSITION OF NET SALES AND OPERATING EARNINGS
(unaudited)

Fiscal Quarter Ended Fiscal Quarter Ended
(In millions, except per June 14, 2008 June 16, 2007
share data)
----------------------------------------------------------------------

Net sales
Retail food $10,346 $10,423
77.5% 78.4%
Supply chain services 3,001 2,869
22.5% 21.6%
----------------------------------------------------------------------
Total net sales $13,347 $13,292
100.0% 100.0%
======================================================================

Operating earnings
Retail food operating
earnings $ 399 $ 449
Supply chain services
operating earnings 86 67
General corporate expenses (29) (50)
----------------------------------------------------------------------
Total operating earnings 456 466
Interest expense, net 190 223
----------------------------------------------------------------------
Earnings before income
taxes $ 266 $ 243
Income tax expense 104 95
----------------------------------------------------------------------
Net earnings $ 162 $ 148
======================================================================

LIFO charge $ 20 $ 7

Depreciation and
amortization
Retail food $ 296 $ 295
Supply chain services 26 29
----------------------------------------------------------------------
Total $ 322 $ 324
======================================================================
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SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)

Fiscal Quarter Ended Fiscal Quarter Ended

(In millions, except June 14, 2008 % of sales June 16, 2007 % of sales
per share data)
----------------------------------------------------------------------

Net sales $ 13,347 100.0% $ 13,292 100.0%
Cost of sales 10,282 77.0% 10,209 76.8%
----------------------------------------------------------------------
Gross profit 3,065 23.0% 3,083 23.2%

Selling, general and
administrative
expenses 2,609 19.6% 2,617 19.7%
----------------------------------------------------------------------
Operating earnings 456 3.4% 466 3.5%

Interest expense,
net 190 1.4% 223 1.7%
----------------------------------------------------------------------
Earnings before
income taxes 266 2.0% 243 1.8%
Income tax expense 104 0.8% 95 0.7%
----------------------------------------------------------------------

Net earnings $ 162 1.2% $ 148 1.1%
======================================================================

Net earnings per
common share
Basic $ 0.76 $ 0.70
Diluted $ 0.76 $ 0.69
Weighted average
common shares
outstanding
Basic 212 211
Diluted 214 216
*T

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SUPERVALU INC. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(unaudited)
June 14, 2008 February 23,
2008
----------------------------------------------------------------------

ASSETS
Current assets
Cash and cash equivalents $ 259 $ 243
Accounts and notes receivable, net 886 951
Inventories 2,956 2,776
Prepaid and other current assets 197 177
----------------------------------------------------------------------
Total current assets 4,298 4,147

Land, buildings, leasehold improvements and
equipment, net 7,543 7,533

Goodwill 6,956 6,957

Intangibles, net 1,934 1,952

Other assets 497 473
----------------------------------------------------------------------

Total assets $21,228 $21,062
======================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities

Accounts payable and accrued liabilities $ 3,386 $ 3,354
Current maturities of long-term debt and
capital lease obligations 446 331
Other current liabilities 892 922
----------------------------------------------------------------------
Total current liabilities 4,724 4,607

Long-term debt and obligations under
capital leases 8,404 8,502

Other long-term liabilities and deferred
credits 1,988 2,000

Total stockholder's equity 6,112 5,953

----------------------------------------------------------------------

Total liabilities and stockholders' equity $21,228 $21,062
======================================================================
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SUPERVALU
Investors and Financial Media:
David Oliver, 952-828-4540
david.m.oliver@supervalu.com
or
Jean Giese, 952-828-4939
jean.giese@supervalu.com

Copyright Business Wire 2008