MINNEAPOLIS -- Fueled by its 1992 acquisition of Wetterau, Supervalu reported record earnings for the fourth quarter and year ended Feb. 26.
Sales fell 4.3% in the quarter and rose 26.8% for the year.
In the fourth quarter, net earnings rose 5.3% to $52.6 million from $49.9 million in the prior year's period. Sales declined to $3.69 billion from $3.85 billion, partly reflecting a reduction in customers following consolidations, a spokeswoman said. Same-store sales in the retail segment fell 2%, reflecting a weak retail environment, particularly for the firm's Laneco and Twin Valu stores, and sales reductions in certain Cub stores caused by openings of new Cub units in nearby locations. For the year, corporate net earnings advanced 12.6% to $185.3 million from $164.5 million the year before. Sales increased to $15.9 billion from $12.6 billion.
Mike Wright, chairman, president and chief executive officer, said the company's overall earnings represent "excellent results." He attributed sales and earnings increases to the Wetterau acquisition and the "underlying operating strength of the company."
However, he pointed to a significantly reduced contribution from ShopKo, which was partially divested from the company in October 1991.
Chuck Cerankosky, an analyst with Hancock Institutional Equity Services, Cleveland, said the company's "wholesale performance was better than expected, while the retail was in line with expectations.
"The company is pruning unprofitable businesses and is earnings-driven. I'm not too concerned with the top line at this time; I want to see the company maintain profitability."