“While our shift to a fair price plus promotion strategy is right for our business, it is essential we move even more aggressively to lower prices and anticipate and respond to competitor actions,” said Craig Herkert, chief executive officer and president for Supervalu. “We expect our business transformation to meet our customers’ demands for great quality at lower prices. We intend to do this while remaining profitable, continuing to pay down debt and investing the capital to maintain and enhance our stores and related assets. Accordingly, we will be pursing deeper and more structural cost savings initiatives. Also, we are adopting more flexible financing facilities, reducing our near-term capital expenditures and suspending our dividend.”
The company also said it is suspending identical store sales and earnings per share guidance and withdrawing any previous guidance given for fiscal 2013. For fiscal year 2013 the company plans to focus on debt reduction estimated in the range of $450 million to $500 million.
“Supervalu continues to be a profitable company with cash flow from operations of $227 million in the first quarter of 2013,” Mr. Herkert said. “With our first fiscal quarter results falling well below our expectations, we must wage a more forceful response to the competitive challenges we face. We believe the steps we are taking are prudent and will be beneficial to all of our constituents.”
