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    Supervalu Reports 35 Percent Rise in 1Q Profits, Restates Earnings

    MINNEAPOLIS - Supervalu Inc. said on Monday its first-quarter profits rose 35 percent to $77.2 million, boosted by an accounting change related to goodwill.

    MINNEAPOLIS - Supervalu Inc. said on Monday its first-quarter profits rose 35 percent to $77.2 million, boosted by an accounting change related to goodwill. Sales in the quarter ended June 15 were $5.8 billion, down from $6.9 billion a year ago, and diluted earnings per share were $0.57.

    "I am pleased with our ability to generate improving EBITDA margins across the board over last year's first quarter, starting fiscal 2003 on solid ground," said Jeff Noddle, Supervalu chairman and CEO. "Supervalu's ability to deliver on our profit goal, despite a sluggish sales environment, demonstrates that the business momentum generated last year continued into the first quarter as we continue to manage the business for improved returns."

    For the first quarter, retail sales were $2.8 billion, flat with last year's first quarter. Excluding the impact of retail operations exited in last year's first quarter, total retail sales increased approximately 4.0 percent. Comparable sales, or those in stores open at least a year, were down 1.1 percent.

    After discovering the cost of goods misstatements last week, Supervalu lowered profits by $17.6 million cumulatively for the past three fiscal years. The company said a subsequent review, conducted with help from external auditors, found the improper actions were limited to one individual, who has resigned.

    As of June 15, 2002, Superalu's retail store network consisted of 1,330 stores in 39 states. Comprising the company's retail network were: 1,067 Save-A-Lot extreme value stores -- 247 owned and 767 licensed food stores and 53 Deals - Nothing Over a Dollar general merchandise stores; 204 price superstores including Cub Foods, Shop 'n Save, Shoppers Food Warehouse, Metro and bigg's stores; and 59 traditional supermarkets including Farm Fresh, Scott's Foods and Hornbacher's stores.

    The company's store expansion plans for fiscal 2003 are projected at 10 to 15 price superstores and 150 to 170 Save-A-Lot extreme value stores including owned and licensed, as well as Deals stores -- acquired and opened.

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