"By eliminating the split ownership of the Shop 'n Save banner in the Pittsburgh market, Shop 'n Save's go-to-market strategy will be simplified," says Jeff Noddle, Supervalu's chairman and CEO, in a statement. Independent operators currently run 55 of the stores in the Pittsburgh area.
The charge per share the company will take as a result of the sales will be between 48 cents and 50 cents. As a result, diluted earnings per share for the year are forecast from $1.90 to $2.04 per share.
Hurricane Katrina as well as higher gasoline prices could further impact the company's sales, executives say. Supervalu operates 1,555 units in 40 states, nearly 1,300 of them Sav-A-Lot stores. "The sales environment has weakened since the first quarter as the impact of higher fuel prices continues to unfold across the consumer spending landscape," Noddle says. "We are working to refine our merchandising programs during this challenging environment to generate sales improvement."
Its 268 regional banner stores including Cub Foods, Shop 'n Save, Shoppers Food & Pharmacy, bigg's, Farm Fresh, Scott's Foods and Hornbacher's. During its latest reported quarter, which ended June 18, Supervalu units' same-store sales were down 0.4% and retail net sales increased 1.7%, to $3.2 billion.
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