Supervalu Earnings Beat, Though Sales Fall at Save-A-Lot

By Anne Steele 

Supervalu Inc. on Tuesday posted earnings that topped expectations in its fourth quarter, though revenue slid 10% and same-store sales fell at its deep-discount chain, a setback to its plans to spin off that business.

Supervalu owns supermarket chains including Cub, Fresh Farm and Shop n' Save. Like many of its peers, Supervalu has struggled to distinguish itself in the highly competitive supermarket industry. The company has been left in a middle ground as low-price, no-frills chains have attracted cost-conscious customers and specialty chains led by Whole Foods Market Inc. have lured wealthier shoppers.

Supervalu said last year it was considering spinning off Save-A-Lot, a discount grocery chain that has been a rare bright spot for the company. Save-A-Lot same-store sales fell 2.2% in the most recent quarter.

The company in February named Mark Gross its new chief executive, adding an industry veteran with merger-and-acquisition experience to its ranks as the grocer seeks to spin off its deep-discount chain.

"Although fourth-quarter sales were softer than we had forecast, I am optimistic about our future prospects," Mr. Gross said Tuesday.

In all, Supervalu said earnings rose to $52 million, or 20 cents a share, up from $39 million, or 14 cents a share, a year earlier. Excluding debt refinancing, store closures and expenses related to the potential Save-A-Lot spinoff, adjusted per-share earnings rose to 23 cents.

Revenue fell 10% to $3.95 billion.

Analysts polled by Thomson Reuters had forecast 19 cents a share in adjusted earnings on $4.02 billion in revenue.

Shares in the company, inactive premarket, have added 24% over the past three months, cutting the 12-month slide to 53%.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

April 26, 2016 09:54 ET (13:54 GMT)

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