MINNEAPOLIS (AP) — Grocer Supervalu Inc.’s fiscal fourth-quarter net income dipped 2 percent, partly weighed down by softer sales and store closings.
The earnings topped Wall Street expectations. Supervalu’s stock surged $1.22, or 13.4 percent, to $10.30 in premarket trading.
The operator of Albertsons, Jewel-Osco and Save-A-Lot chains also provided a 2012 earnings outlook on Thursday in range of Wall Street’s expectations.
Supervalu’s net income fell to $95 million, or 44 cents per share, for the period ended Feb. 26 from $97 million, or 46 cents per share, a year ago.
But the performance still beat the 33 cents per share expected by analysts surveyed by FactSet.
The grocery industry has grown intensely competitive during the weak economy as markets try to lure shoppers. They’ve relied heavily on promotions to do this but it has come at the expense of their already-thin profit margins.
Supervalu, which launched a turnaround plan more than a year ago, has worked hard to make changes. In addition to store closings, the company has brought in new management, cut costs and lowered debt.
Company leaders say they are keeping tight controls on costs and have learned from missteps in the past.
“Our transformation initiatives helped us execute more effective promotions that contributed to stronger than anticipated results,” CEO and President Craig Herkert said in a statement.
The current quarter’s results included charges totaling 31 cents per share tied to store closings, employee-related costs and an asset-impairment charge. These were offset by a gain on the sale of one of its businesses.
Revenue fell 6 percent to $8.66 billion, missing Wall Street’s estimate of $8.73 billion.
Revenue at stores open at least a year dropped 5 percent. This figure is a key gauge of a retailer’s health because it excludes revenue from stores opened or closed during the year.
Fourth-quarter retail net sales declined to $6.7 billion from $7.2 billion, while supply chain services net sales were flat at $2 billion.
For the year, Supervalu lost $1.51 billion, or $7.13 per share. That compares with earnings of $393 million, or $1.85 per share, in the previous year.
Adjusted earnings fell to $1.39 per share from $2.03 per share. Annual revenue dropped 8 percent to $37.53 billion.
Supervalu said Thursday it expects 2012 earnings of $1.20 to $1.40 per share. Analysts expected $1.27.
The company has more than 4,000 stores and about 140,000 employees.
(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)