MINNEAPOLIS — Supervalu here said Thursday that second-quarter sales and profits improved over year-ago results due to cost controls and gains from its service agreements with the retail stores it sold to Albertsons.
The company said net income from continuing operations, adjusted for one-time gains and charges, was $ 33 million, vs. a loss from continuing operations of $ 20 million in the year-go period. Second-quarter sales totaled $ 3.95 billion, vs. $ 3.94 billion in the year-ago quarter, buoyed by $ 62 million from the service agreements with the former stores.
Sales declined at each of the company three main operating divisions — wholesale, retail and Save-A-Lot.
Wholesale sales were down 1.6%, to $ 1.84 billion, which the company attributed to lower sales to existing customers, including military, offset in part by net new business. Operating earnings improved by 40 basis points, however, to 3.2% of sales, or $ 59 million, due to higher gross margins and lower logistics costs.
Save-A-Lot sales fell 0.1%, to $ 972 million, reflecting the impact of overall identical store-sales declines of 0.3%, partially offset by the impact from new stores. ID sales for corporate Save-A-Lot stores were up 4.6%. Adjusted operating earnings were 3.7% of sales, or $ 37 million, vs. $ 33 million, or 3.5% of sales a year ago.
Read more: Supervalu Slows Sales Erosion in Q1
Retail food sales were down 1.1%, to $ 1.07 billion, reflecting negative IDs of 0.9%. Retail operating earnings were $ 7 million, or 0.7% of sales, vs. $ 12 million, or 1.1% of sales in the year-ago quarter. The company attributed the decline to incremental investment in price and store labor partially offset by the benefit from cost-cutting initiatives and lower depreciation expense.
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