Grocery store operator Supervalu lost money in its latest quarter, but the struggling company said it is in active discussions with several parties over a possible deal.
Supervalu fired its CEO in July, replacing him with Chairman Wayne Sales to lead its turnaround effort. It has closed stores, suspended its dividend, and has been looking for other ways to cut costs. The company has been reviewing options with financial advisers, a process that typically includes the possibility of selling the company.
Supervalu said Thursday that it is still reviewing its strategic options, it has received a number of indications of interest and is talking with several parties.
Shares rose 8 cents, or 3.9 percent, to $2.12 in midday trading. The stock has lost nearly three-quarters of their value this year
The Minneapolis company, whose chains include Albertsons, Cub Foods, Jewel-Osco and Save-A-Lot chains, isn’t the only grocer to have struggled since the recession. Competition in the sector has intensified as consumers watch their spending and more companies seek a cut of their grocery budgets. Many supermarkets have cut their prices to woo shoppers, but this can erode profitability.
For example, Supervalu said Thursday that it has cut prices at its Jewel-Osco stores as part of its plan to increase traffic.
In the three months ended Sept. 8, Supervalu lost $111 million, or 52 cents per share. That compares with a profit of $60 million, or 28 cents per share, a year earlier.
Stripping out costs for closing stores; severance; the declining value of “intangible assets,” which can include a company’s brand; and other one-time items, earnings broke even. Analysts expected profit of 12 cents per share, according to a FactSet poll.
Supervalu has posted an annual loss for three of its past four fiscal years.
In the most recent quarter, revenue also declined 5 percent to $8.04 billion from $8.43 billion, as the company sold most of its retail fuel centers and revenue from stores open at least a year dropped. Wall Street forecast revenue of $8 billion.
Save-A-Lot sales edged up slightly, as the company had 47 new stores at quarter’s end.
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