Supervalu Inc. said Tuesday that it is considering spinning off
its Save-A-Lot chain to better focus on its other segments, as the
discount chain reported better-than-expected results for the June
quarter.
Shares of Supervalu, which had fallen 24% this year through
Monday's close, jumped 11% to $8.18 in early trade on Tuesday.
Supervalu owns supermarket chains including Cub, Fresh Farm and
Shop n' Save. Like other supermarket operators, Supervalu is facing
increased competition from a wide range of rivals including
warehouse clubs, major retailers such as Wal-Mart Stores Inc. and
dollar stores.
There is no specific timetable set for the possible spinoff.
About a third of Save-A-Lot's 1,300 stores are company-owned and
the brand has been a strong performer for the Eden Prairie, Minn.,
company, notably when the company was in trouble several years ago
as other operations struggled. In its most recent quarter,
corporate Save-A-Lot stores logged 2.8% identical-store-sales
growth, compared with 0.6% for the network as a whole. Sales were
$1.41 billion, up from $1.36 billion a year earlier.
Supervalu's retail food segment identical-store sales were down
0.3%. Sales for the segment increased to $1.47 billion from $1.43
billion, mostly due to the impact of new store openings.
Overall, Supervalu reported a profit of $61 million, or 23 cents
a share, up from $43 million, or 17 cents a share, a year earlier.
Revenue increased to $5.41 billion from $5.26 billion.
Analysts expected per-share profit of 20 cents and revenue of
$5.39 billion, according to FactSet.
Write to Angela Chen at angela.chen@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires