MINNEAPOLIS (AP) -- Supervalu Inc. on Tuesday reported a larger loss for its fourth quarter due to another period of falling sales. It was the quarter preceding some major changes for the Minneapolis-based company as it tries to transform itself after years of underperformance.
The company was a laggard in the grocery industry and then the recession hit, compounding its problems as competition intensified. It tried for several years to rescue its business and moved to drastic measures in recent months.
Supervalu completed the sale of five of its chains to an investor group led by Cerebus Capital Management in March in a deal worth $3.3 billion, including debt. Later that month, Supervalu said that would eliminate about 1,100 positions nationwide. The company also recently brought in a new president and CEO for its Save-A-Lot chain, which has become the focus of much of its continuing operations.
Sam Duncan, Supervalu's President and CEO said the quarter was largely about transitioning the company for the future. He said the company's focus is now on driving sales increases.
Supervalu has some room to improve. The company reported that it had a net loss of $1.41 billion, or $6.65 per share, for the period that ended Feb. 23. That compares with a loss of $424 million, or $2 per share, in the fourth quarter last year. After adjusting for severance costs, impairment charges and other special items, it said its loss was 14 cents per share from continuing operations for the period, versus earnings of 2 cents per share in the prior.
Total revenue slipped 2 percent to $3.89 billion from $3.98 billion.
Analysts, on average, were expecting the company to earn 9 cents per share on revenue of $5.18 billion, according to FactSet.
The quarter did not reflect the sale of the Albertson's, Jewel-Osco, Acme, Shaw's and Star Market chains and as a result, some investors saw better times ahead. Shares of the company increased 53 cents, nearly 10 percent, to $5.89 by midday.
Citi analyst Deborah Weinswig said the company's underlying performance was better than expected, noting that its gross margins were essentially in line with expectations. The industry analyst said she believes the company's remaining chains will not require as much investment and looked for more information about how the new, slimmer company might perform.
Supervalu posted a loss for the full fiscal year of $1.47 billion, or $6.91 per share, versus $1.04 billion, or $4.91 per share, for the prior year. Its annual revenue slipped to $17.1 billion from $17.34 billion. It had a loss of 36 cents per share versus 4 cents per share on an adjusted basis.
While its stock has more than doubled in value since the start of 2013, the current price remains just a fraction of what it sold for a few years ago.