Supervalu First-Quarter Profit Up
Minneapolis Net earnings at Supervalu hit a record $162 million in the first quarter of fiscal 2009, representing a 9% increase over earnings of $148 million in the same period last year. Net sales remained flat at $13.3 billion compared to fiscal 2008.
The positive results were attributed primarily to the company’s supply chain services area, which was up 4.6% from $2.9 billion in 2008 to $3.0 billion this year. Growth in new business, lower-than-normal customer attrition, and the ability to pass along inflationary costs also contributed to the chain’s positive performance.
First-quarter retail food net sales declined 0.7 %, from $10.4 billion in first quarter 2008 to $10.3 billion this year. Supervalu cited soft sales and negative same-store sales (down 0.9%) as key contributors. The company’s footprint remained virtually unchanged, with new store openings offset by the closing of underperforming locations.
In the company’s prepared statement, Jeff Noddle, chairman and CEO said, “While we are pleased with our record results and the continued progress of the Albertsons integration, the ongoing weakness in the economy combined with higher food and energy inflation has created conditions that make us take a more cautious view for the balance of the fiscal year. In light of the macroeconomic environment, we have updated our guidance and are responding with tighter expense controls and other cost-savings activities."
Supervalu predicts that total net sales for fiscal 2009 will be approximately $45 billion, including an approximate benefit of $800 million from the 53rd week in the fiscal year. Capital spending is projected to be approximately $1.3 billion, which includes 165 major store remodels, approximately 15 new traditional supermarkets and 55 to 65 limited-assortment stores, including 30 licensed stores.