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MINNEAPOLIS - Supervalu Inc. today announced record net earnings and earnings per share for the third quarter of fiscal 2002 which ended Dec. 1, 2001. The company reported sales for the third quarter of $4.6 billion, net earnings of $59.0 million, earnings per share of $0.44 and cash earnings per share of $0.51.
Jeff Noddle, Supervalu's president and CEO said, "Our above consensus third quarter results were driven by strong improvement in our retail operations including strong momentum at our extreme value retail format, Save-A-Lot. We also continue the important work of repositioning our distribution network for improved efficiency, completing the reconfiguration of five facilities so far this year. In addition, significant strides were made to Supervalu's financial position through working capital reductions and a more focused capital spending program that reduced funded debt by $142 million since fiscal 2001 year end."
Noddle continued, "Our strong performance is a direct result of our commitment to improve both execution and efficiency across our operations while investing selectively in the best growth opportunities for Supervalu. We are confident that the business strategies currently underway will differentiate us with our customers and drive improved financial results."
Retail Food Segment
In the third quarter, retail sales were $2.2 billion, an increase of 1.7 percent compared to last year. Excluding the sales associated with the exit of non-core and under-performing stores, retail sales would have increased approximately six percent. Comparable sales for the quarter were positive 0.7 percent marking steady progress in the current fiscal year. Since the prior year's third quarter, the company added 101 stores including 87 Save-A-Lot stores, 12 price superstores and two conventional supermarkets, excluding store closings. New store activity during the quarter resulted in 25 store openings, including 22 Save-A-Lot stores and three price superstores, bringing Supervalu?s total store network to 1,216, net of store closings that have occurred during the year.
Operating earnings of the retail business for the third quarter increased 37 percent to $93.5 million compared to last year. Operating margins rose 110 basis points as a percent of sales, representing a combination of growth and recovery across retail. Quarterly improvement benefited from more effective merchandising programs, improved store level execution, and comparable sales growth. EBITDA for the retail segment in the third quarter was $134.4 million, or 6.1 percent of sales, up 110 basis points compared to last year's third quarter. In the quarter, Supervalu's retail segment accounted for 48 percent of total company sales and 63 percent of total company operating profit.
Food Distribution Segment
Supervalu's food distribution business reported sales of $2.4 billion in the third quarter. Sales performance compared to the prior year primarily reflects last year's decision to end supply services to Kmart. In addition, Genuardi's, a Supervalu customer, was acquired by a third party and its volume transitioned during the third quarter.
Operating earnings of the food distribution business for the quarter were $54.9 million, which was down compared to last year.