Supervalu Q1 Sales, Profits Decline; CFO Leaves

SN STAFF

MINNEAPOLIS — Supervalu here said Tuesday that first-quarter net income fell more than 40%, to $67 million, as sales slid 9.45%, compared with year-ago results.

Identical-store sales declines of 7.2% and the sale of some locations helped drive a 9.6% decrease in total retail sales for the period, while revenues from supply-chain services fell 7.9%, to $2.6 billion, primarily reflecting Target's switch to self-distribution.

The company said that after adjusting for market exits and the impact of the labor dispute at Shaw's, net income would have been down about 19%, to $92 million.

“While we are putting in place the right programs to best serve our customers, we are disappointed with our first-quarter sales performance," said Craig Herkert, president and chief executive officer, in a prepared statement. "We continue to control our margins well and take costs out of the business and are pleased to reaffirm our full-year earnings guidance before one-time items.”

Separately, the company said Tuesday that Pamela K. Knous, executive vice president and chief financial officer, has resigned to pursue "other career interests," effective July 30. Supervalu said it has retained a search firm and expects to name a successor by the time it reports second-quarter results in October.

"After serving the company for nearly 13 years, and supporting Craig as he became oriented in the early months of his tenure, we mutually agreed that now was an appropriate time for me to move on to a new chapter in my career," Knous said in a prepared statement.

Sherry M. Smith, currently senior vice president, finance, will serve as interim chief financial officer until the search is completed.