Minneapolis -- Grocery giant Supervalu Inc. reported Wednesday that profit for the quarter ended June 16 plummeted 45% to $41 million, compared with $74 million in the year-ago period. The struggling parent to Albertsons, Jewel-Osco and Save-A-Lot grocery banners, among others, had begun to show improvement in its fourth quarter, but tumbling revenues have halted the forward momentum.
Sales dropped to $10.59 billion, from $11.11 billion in the same period last year, and missed Wall Street’s forecasted $10.61 billion in revenue.
CEO Craig Herkert, the former Wal-Mart Stores executive who joined the company in 2009 to effect turnaround efforts, said that SuperValu will suspend its dividend and review its options, which he emphasized, do not include bankruptcy. However, although the company has not made an announcement regarding a sale, a strategic review typically involves considering selling the company.
In the meantime, Herkert emphasized that the grocer will enact aggressive price-cutting measures and concentrate on paying down debt and investing in its stores.
"These are bold but necessary moves, which will position Supervalu for success in this increasingly competitive environment," Herkert said in a statement.
Part of the plan calls for cutting capital spending to a range of $450 million to $500 million from $675 million. The company said it still expects to complete approximately 40 store remodels and increase Save-A-Lot’s store count by approximately 40 stores, including licensed locations.