SUPERVALU REPORTS FIRST QUARTER FISCAL 2012 EARNINGS

Supervalu reported first quarter fiscal 2012 net sales of $11.1 billion and net earnings of $74 million. In the first quarter of fiscal 2011, net sales were $11.5 billion and net earnings were $67 million. When adjusted for $25 million in net after-tax charges primarily related to retail market exits in Connecticut and Cincinnati as well as the impact of a labor dispute at Shaw's, first quarter fiscal 2011 net earnings were $92 million.

First quarter retail food net sales were $8.6 billion compared to $9 billion last year. The change in net sales primarily reflects identical store sales of negative 3.9% and previously announced market exits. Total retail square footage was 63.5 million, a 2.1% decrease from the first quarter of fiscal 2011 primarily as a result of fiscal 2011 market exits. Excluding the impact of market exits and store closures, total retail square footage increased 1.8% compared to the first quarter of fiscal 2011.

Gross profit margin in the first quarter was $2.5 billion, or 22.1% of net sales, compared to $2.6 billion or 22.5% last year. The decrease in gross margin as a percent of net sales reflects a higher LIFO charge, the impact of higher fuel sales, as well as the mix impact resulting from the divestiture of Total Logistic Control in the fourth quarter of fiscal 2011. In addition, the benefits of promotional effectiveness and reduced shrink fully funded price investments in the quarter.
Selling and administrative expenses in the first quarter were $2.2 billion, or 19.6% of net sales, compared to $2.3 billion, or 19.9% of net sales last year. The decrease in selling and administrative expenses as a percent of net sales reflects savings achieved from cost reduction initiatives, the benefit of higher fuel sales and a reduction in corporate expenses for non-operating properties. These benefits were partially offset by the impact of sales deleveraging and increases in employee-related expenses.

Operating earnings for the first quarter were $280 million, or 2.5% of net sales, compared to $301 million, or 2.6% of net sales last year. Retail food operating earnings were $219 million, or 2.5% of net sales. Last year's retail food operating earnings were $251 million, or 2.8% of net sales, and included $21 million in net pre-tax charges primarily related to retail market exits in Connecticut and Cincinnati, as well as the impact of the labor dispute at Shaw's. When adjusting for these items, last year's retail food operating earnings were $272 million, or 3% of net sales. The change in retail food operating earnings as a percent of net sales was the result of a higher LIFO charge and reduced sales leverage on operating expenses, which were partially offset by cost reduction initiatives.