Supervalu loses $201 million in 4Q

Supervalu Inc., one of the nation's largest grocery chains, said Thursday that it lost $201 million in its fiscal fourth-quarter mostly because of costs related to store closings and a hefty impairment charge. Adjusted results managed to top analysts' estimates.

Shares of Supervalu, which operates Albertsons, Save-A-Lot, Farm Fresh and other grocery chains, jumped $1.48, or nearly 10 percent, to $16.46 in morning trading.

The grocery industry has been one of the strongest among retailers during the recession as consumers eat in more. However, the sector has become more competitive as supermarkets compete against each other, wholesalers and discounters to draw shoppers focused on finding the best values.

Eden Prairie, Minn.-based Supervalu said it lost 95 cents per share for the period ended Feb. 28. That's down from a profit of $156 million, or 73 cents per share, a year earlier.

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Excluding 58 cents per share related to store closings, $1.17 per share for impairment charges and other items, profit was 87 cents per share. The quarter also included one extra week, which added about 6 cents per share to results.

Analysts polled by Thomson Reuters, whose estimates generally exclude one-time items, expected earnings of 79 cents per share.

Sales rose 4 percent to $10.82 billion, but missed analysts' estimates of $10.86 billion.

Retail food sales made up a bigger percentage of total sales, further proof that recession-conscious shoppers are still dining at home more. Retail food sales made up 78.5 percent of total sales for the quarter, compared with 77.8 percent a year ago.

Supervalu predicts 2010 adjusted profit of $2.50 to $2.65 per share on sales of about $43 billion. Analysts expect earnings of $2.59 per share on revenue of $43.55 billion.

"We know that consumers are placing a greater emphasis on price, and we are taking the actions necessary to strengthen our overall competitive position. While these actions will have a short-term impact on profitability, they build a better value proposition for consumers in this economic environment and provide a foundation for future robust sales growth," Chairman and Chief Executive Jeff Noddle said in a statement.

The grocery chain also plans to lower its debt by about $700 million in 2010, $100 million more than previously forecast. It anticipates about $750 million in capital spending, which will include 75 to 80 major store remodels, 30 to 40 minor remodels, 3 new traditional supermarkets and 50 to 60 new limited assortment stores, including 35 licensed stores.

For fiscal 2009, Supervalu lost $2.86 billion, or $13.51 per share, compared with a profit of $593 million, or $2.76 per share, in the previous year.

Adjusted earnings were $615 million, or $2.89 per share.

Annual revenue improved to $44.56 billion from $44.05 billion.

Supervalu, which has about 180,000 workers, operates 2,421 retail grocery locations, which includes 862 licensed sites.

(Copyright 2009 by The Associated Press. All Rights Reserved.)