Supervalu swings to loss in quarter

by FoodBusinessNews.net Staff
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MINNEAPOLIS — As the result of large impairment charges, Supervalu suffered a loss of $2,944 million during the third quarter compared with net income of $141 million during the same quarter of the previous year.

Net sales for the quarter ended Nov. 29 were $10,171 million, about flat compared with sales of $10,211 million during the same quarter of the previous year. Sales were impacted as new store growth was offset by the impact of store closings and negative identical store sales.

"I am pleased to report that for the third quarter, despite cautious consumer spending, we were able to deliver adjusted diluted earnings per share of 62c, excluding the non-cash impairment charges, in line with our expectations and cycling against a record quarter in the prior fiscal year," said Jeff Noddle, chairman and chief executive officer. "Our fiscal 2009 projected cash flows are strong, funding $1.2 billion in capital spending, $0.4 billion in debt reductions and $0.1 billion in dividends. We continue to position the company for long-term success, taking into consideration the current economic environment."

For the nine months, Supervalu sustained a loss of $2,654 million compared with an income of $437 million during the same period of the previous year. Net sales were $33,744 million, about flat compared with $33,661 million during the same period of the previous year.

"We are taking steps that will build a stronger Supervalu and better position us for success in fiscal 2010," Mr. Noddle said. "Driven in part by the economy as well as the planned reduction in capital expenditures and activities tied to the final year of our transformation, we will be incurring certain charges in the fourth quarter, predominately non-cash charges related to the closure of non-strategic store locations and cost mitigation efforts."

For fiscal 2009, the company anticipates earnings per share in the range of $2.80 to $2.90, excluding charges.

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