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Supervalu Takes $907M Charge

MINNEAPOLIS — Supervalu here on Wednesday said it has taken a pre-tax charge of $907 million for the write-down of goodwill and intangible asset impairment in the fiscal third quarter, leading the company to post a loss of $750 million for the period.

When adjusted for the non-cash charges, which totaled $800 million after taxes, the company said its earnings would have been $50 million for the 12-week period, which ended Dec. 3. Sales totaled $8.3 billion, down about 4% compared with a year ago.

Retail food sales were down about 4.5%, to $6.3 billion, for the quarter, and identical-store sales fell 2.9%. The wholesaling division saw sales declines of 5.4% for the quarter, to $2 billion, which the company attributed primarily to Target Corp.’s transition to self-distribution and the company’s sale of its Total Logistic Control division.

Excluding the goodwill and intangible asset impairment charges, retail food operating earnings in the third quarter were $148 million, or 2.3% of net sales, vs. $146 million in adjusted operating earnings, or 2.2% of net sales, in the year-ago third quarter.

The company said its gross margins grew as a percent of sales (21.7% vs. 21.5% a year ago) in the period due to promotional effectiveness, partially offset by price investments and a higher inventory charge.

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