Supervalu Net Rises on Save-A-Lot Growth

By Tess Stynes 

Supervalu Inc.'s fiscal third-quarter earnings nearly doubled on lower expenses and growth at its Save-A-Lot business, masking a modest decline in total revenue.

Traditional grocers such as Supervalu and Safeway Inc. have struggled in recent years as they compete for customers in a sluggish economy. The sector also has been pressured as dollar stores, drugstores and mass-market retailers such as Wal-Mart Stores Inc. expanded their grocery offerings.

"Although we still have work to do to improve our sales trajectory, I am pleased with the accomplishments we made within our operations this quarter and look forward to completing my first fiscal year leading this company," said Chief Executive Sam Duncan, who was named CEO last February.

Retail food sales fell 2.6% to $1.06 billion, and Save-A-Lot sales increased 2.6% to $991 million. Same-store sales dropped 1.9% for retail foods and improved 1.7% for the Save-A-Lot network.

For the period ended Nov. 30, Supervalu reported a profit of $31 million, or 12 cents a share, up from $16 million, or eight cents a share, a year earlier. Excluding pension-related charges, asset write-downs and other items, adjusted earnings from continuing operations were 13 cents a share, compared with a year-earlier adjusted loss of seven cents a share. Revenue decreased 1% to $4.01 billion.

Analysts polled by Thomson Reuters recently expected per-share earnings of 13 cents and revenue of $4.05 billion.

Gross margin rose to 14.2% from 13.1%. Selling and administrative expenses fell 7.2%.

Write to Tess Stynes at [e-mail]

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