(Reuters) Supervalu is in talks with several suitors as efforts proceed to sell the third-largest U.S. grocery store operator, it said on Thursday, helping to send its shares up more than 4 percent.
The owner of chains including Jewel-Osco, Save-A-Lot and Albertsons also reported a quarterly loss on charges from store closings and asset writedowns.
Wall Street’s expectations were low going into the quarter, and Supervalu’s supermarket sales fell less than some analysts expected.
Supervalu is also working to pay down the large debt from its 2006 acquisition of more than 1,100 Albertsons stores.
The company posted a net loss of $111 million, or 52 cents per share, for the second quarter ended on September 8, compared with a year-earlier profit of $60 million, or 28 cents a share.
Excluding the charges, the company reported break-even results. Analysts on average had forecast earnings of 13 cents a share, according to Thomson Reuters I/B/E/S.
Sales fell to $8.04 billion from $8.43 billion a year earlier. Analysts were expecting $8.01 billion.
Supervalu’s retail food division reported a 4.3 percent decline in sales at identical stores. The company defines that measure as sales at supermarkets operating for four full quarters, including store expansions, and excluding fuel sales.
Save-A-Lot’s network identical-store sales fell 3.7 percent.
The company attributed the declines to price cuts and competition.
Supervalu, which recently replaced Chief Executive Officer Craig Herkert with Chairman Wayne Sales, has been closing stores and cutting costs. It suspended its dividend in July to fund its aggressive price cuts. At the same time, it put itself up for sale.
The company finished its price repositioning at Jewel-Osco, the leading supermarket operator in Chicago. While the company said it was pleased with the results from that project, it is refining its pricing strategy as it redoubles cost-cutting measures.
The results from Supervalu come as Kroger, the largest U.S. supermarket operator, is getting more bullish.
On Tuesday, Kroger raised its long-term target for earnings-per-share growth to a range of 8 percent to 11 percent from a previous goal of 6 percent to 8 percent.
The company, which is buying back shares and rewarding investors with dividend increases, also said it would increase its $2 billion annual capital spending budget by $200 million a year.
Shares of Supervalu were up 4.4 percent at $2.13 in midday trading.
Reporting by Lisa Baertlein in Los Angeles; Editing by Lisa Von Ahn