SUPERVALU – SVU – Suspending the quarterly dividend

SUPERVALU INC. (NYSE: SVU) announced results for the first quarter of fiscal 2013. For the quarter ended June 16, 2012, the Company reported net sales of $10.6 billion and net earnings of $41 million, or $0.19 per diluted share. In the first quarter of fiscal 2012, net sales were $11.1 billion and the Company reported net earnings of $74 million, or $0.35 per diluted share. Cash flow from operations was $227 million in the first quarter of 2013, compared to $245 million in the same quarter last year.

• Cash Flow from Operations of $227 Million; Net Earnings of $41 Million, or $0.19 Per Share
• Accelerating Price Investments
• Intensifying Focus on Expense Reductions
• Enhancing Financial Flexibility
• Increasing Debt Reduction to a Range of $450 to $500 Million for Fiscal 2013
• Suspends Dividend
• Initiates Review of Strategic Alternatives

“While our shift to a fair price plus promotion strategy is right for our business, it is essential that we move even more aggressively to lower prices, and anticipate and respond to competitor actions. We expect our business transformation to meet our customers’ demands for great quality at lower prices,” said Craig Herkert, chief executive officer and president. “We intend to do this while remaining profitable, continuing to pay down debt and investing the capital to maintain and enhance our stores and related assets. Accordingly, we will be pursuing deeper and more structural cost savings initiatives. Also, we are adopting more flexible financing facilities, reducing our near-term capital expenditures and suspending our dividend.”

“As we proceed with these actions in an effort to drive more traffic to our stores and ensure we are the destination of choice in the neighborhoods we serve, we remain focused on maintaining our operational and financial strength,” continued Herkert. “We are committed to generating operating cash flows of more than $1 billion annually and meeting or exceeding our debt reduction targets. And, to assure we are evaluating the full range of opportunities available to us to create value for shareholders, the Company’s Board and management, together with its financial advisors, are reviewing strategic alternatives for our business.”

“These are bold but necessary moves, which will position SUPERVALU for success in this increasingly competitive environment,” said Herkert.

About SUPERVALU INC. – SVU

SUPERVALU INC.(SVU) is one of the largest companies in the U.S. grocery channel with annual sales of approximately $35 billion. SUPERVALU serves customers across the United States through a network of approximately 4,400 stores composed of 1,101 traditional retail stores, including 798 in-store pharmacies; 1,336 hard discount stores, of which 939 are operated by licensee owners; and 1,950 independent stores serviced primarily by the Company’s food distribution business.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.