Jan 9 Supervalu Inc's quarterly net
profit nearly doubled as the supermarket operator benefited from
cost savings after selling hundreds of underperforming grocery
stores last year.
Executives said on Thursday that the company's supermarket
business had stabilized after a major restructuring, but a cut
in federal food stamp benefits that started in November weakened
sales at the Save-A-Lot discount warehouse stores by slightly
less than 1 percent during the quarter.
Shoppers appeared to offset the lost benefits with cash
purchases, executives said.
The company, whose supermarket chains include Cub, Farm
Fresh and Shop 'N Save, said net income rose to $31 million, or
12 cents per share, in the third quarter ended Nov. 30 from $16
million, or 8 cents per share, a year earlier.
Excluding a charge for a multi-employer pension plan
withdrawal and other special items, earnings met analysts'
expectations of 13 cents per share.
Gross margins expanded to 14.2 percent from 13.1 percent.
Revenue fell marginally to $4.01 billion, missing the
analysts' average forecast of $4.05 billion, according to
Thomson Reuters I/B/E/S.
Supervalu, like larger rival Safeway Inc, has been
battling market share losses to rivals such as Kroger Co
and Wal-Mart Stores Inc and has abandoned some hotly
competitive regional markets to cut costs.
Sales at Supervalu's biggest wholesale grocery distribution
business fell 3.7 percent to $1.91 billion due to the loss of
two large clients and a drop in military orders due to the U.S.
Sales at Save-A-Lot stores rose 2.6 percent, however. Sales
at identical stores - those operating for four full quarters and
including expansions but not fuel sales - increased 1.7 percent.
At the company's other supermarket chains, sales fell 2.6
percent to $1.06 billion, hurt by a 1.9 percent drop in
Shares of Minneapolis-based Supervalu were down 1 cent at
$7.02 in morning trading on Thursday. The stock has more than
doubled in value since the company announced the sale of 900
stores, including its Albertsons chain, about a year ago.