In spite of a healthy profit gain for the first quarter of fiscal 2009, Supervalu yesterday cut its fiscal year profit and sales outlooks, due to concerns about the state of the economy and rising food and fuel prices.

"The ongoing weakness in the economy, combined with higher food and energy inflation, has created conditions that make us take a more cautious view for the balance of the fiscal year," said Jeff Noddle, Supervalu chairman and c.e.o., in a conference call with analysts Tuesday.

Noddle said the company will cut spending further, "to mitigate the macro-economic headwinds and stay focused on those things over which we have control."

During the call, Noddle affirmed that his Minneapolis-based company is "not changing the timing, focus, or execution of any of our strategic initiatives," including its remodeling program stays on track with 43 major remodels on tap in the first quarter, and 165 major remodels forecasted to be completed for the year.

Supervalu's enhanced house brands program is also on track following the recent "extremely successful launch of our Wild Harvest Natural and Organic line," Noddle said. During the call, he called the recent hiring of the company's new c.m.o., Steve Michaelson, "a critical step to building our marketing competency and our organization, leadership, and focus."

For the first quarter ended June 14, Supervalu posted net income of $162 million, or 76 cents a share, up from $148 million, or 69 cents a share a year earlier. The results included acquisition-related costs of 3 cents for the latest quarter versus 8 cents in the year ago period.

Revenue rose 0.4 percent to $13.35 billion in the quarter, but gross margins slipped to 23 percent from 23.2 percent, with its supply chain business sector comprising a larger percentage of the grocer's quarterly sales. A 4.6 percent increase in supply chain services as a result of higher wholesale prices, new business, and lower-than-average customer attrition helped offset a 0.7 percent decline in retail food sales.

Same store sales, excluding fuel, were down 0.9 percent, largely as a result of intense competitive activity in many of Supervalu's largest markets.

The most telling news was that looking ahead, the nation's third-largest supermarket operator lowered its full year earnings forecast by 6 cents to $3 to $3.16 a share, down from $3.06 to $3.22 per share.

Supervalu further expects revenue to ring in at the low end of its $45 billion to $45.5 billion range; and it now anticipates lowered same store sales growth of 0.5 percent vs. its previous forecast of 1 percent to 2 percent.

The downward projections sent Supervalu shares down $1.83, or 6.58 percent, closing at $25.99 Tuesday in New York Stock Exchange trading.