US retail group Supervalu, part of the consortium acquiring the retailer Albertsons, reported fourth-quarter sales more or less on a par with the fourth quarter of 2005, but net earnings were reduced by various after-tax charges and costs associated with the purchase of Albertsons.
The company posted fourth-quarter sales of US$4.6bn, unchanged in comparison with the same period of fiscal 2005. Net earnings for the fourth quarter were $6m, against $92.9m last year, reduced by after-tax charges of $72.4m related to the sale of Cub Foods stores, asset impairment related to the planned disposition of its Deals stores, the plan to sell its Shop ‘n Save Pittsburgh stores, and costs related to supply chain growth initiatives.
For fiscal 2006 as a whole, Supervalu reported net sales of $19.9bn, up from $19.5bn in 2005, with net earnings falling to $206.2 m from $385.8m last year. Full-year net earnings were also hit by after-tax charges.
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“Fiscal year 2006 was the year we mapped out our vision for the future, invested in our business and then focused our energies on the activities necessary to effectively combine our operations with the premier retail properties of Albertsons,” said chairman and CEO Jeff Noodle. “The reported results for fiscal 2006 include the divesture of certain non-strategic retail properties, as well as the sale of the Cub Foods stores in Chicago to facilitate the pending acquisition.
“Our efforts are fully directed toward bringing the acquisition to successful completion. Our significantly expanded footprint of approximately 2,500 stores will maximise our scale and allow us to deliver the economics of our combined enterprise. Fiscal 2007 will be the year we begin the transformation of Supervalu into a national retail and pharmacy powerhouse.”
Noodle added that the company was in the process of finalising the executive leadership of the new enterprise, and more details would be announced in early-May. The company said it also hoped to provide full-year guidance of the combined new enterprise by mid-May, and still expected the Albertsons deal to close during June.
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