Supervalu considers store closings as stock price tumbles

07/12/2012 12:48:00 PM
Doug Ohlemeier

Struggling after releasing news of an earnings plunge, Supervalu Inc. is considering selling stores and has suspended its quarterly dividend.

During a July 11 investors conference call, Craig Herkert, chief executive officer of the Eden Prairie, Minn.-based supermarket operator, said the company’s earnings fell 45% during the last quarter to $2.88 a share on July 12.

Herkert said bankruptcy is not a part of the company’s strategic review, which includes plans to better compete with other grocery discounters, according to media reports.

Supervalu, which operates stores including Albertsons, Jewel-Osco, Save-a-Lot and Shaw’s, plans to institute aggressive price cuts.

According to Bloomberg.com, the company’s shares fell 35% to-date this year and put it on a course for its fifth consecutive yearly decline. Analysts say Supervalu hasn’t earned an annual profit since 2010.

In June, Supervalu publicized layoffs in its Albertsons California and Nevada stores. In a July statement, the company announced it would cut costs by an additional $250 million over two years.

The company is retaining the services of Goldman Sachs Group Inc. and Greenhill & Co. to review its options, according to news reports.



Comments (0) Leave a comment 

Name
e-Mail (required)
Location

Comment:

characters left

Join the conversation - sign up for FREE today!
FeedWind
Feedback Form
Leads to Insight