Struggling grocery chain SuperValu Inc. (NYSE:SVU) reported results for its last quarter of fiscal 2011 that beat analysts’ estimates and validated its efforts to turn around operations by cutting jobs, shuttering stores, and selling businesses.
Shares shot up 15 percent on news that that the company earned 38 cents a share in the fourth quarter, compared to analysts’ forecasts of 35 cents a share, excluding once-off items. The market brushed off concerns that the company lost $424 million ($2 per share) compared to a profit of $95 million (44 cents a share) in the year ago period, primarily due to impairment costs and costs incurred on layoffs and store closures. In a release issued Tuesday, SuperValu CEO Craig Herkert said he was pleased with the results of the launch of the company’s “business transformation” in the past year.
Sales were $8.23 billion against last year’s $8.66 billion. Gross profit was down to $1.88 billion from $2.02 billion last year with gross margins as a percentage of sales falling to 22.8 percent, from 23.3 percent last year. Margins were impacted by higher expenses on advertising and price realizations.
Net income excluding items for the full year was $265 million, or $1.25 a share. The company forecasts that it will earn $1.27 to $1.42 per share in fiscal 2013, much better than the $1.18 projected by analysts.