SuperValu Inc, the third-biggest U.S. supermarket chain by sales, said Thursday that more effective promotions fueled quarterly profit that topped its own expectation, and shares surged 13 percent.
The results landed as SuperValu works to turn its business around and get its everyday pricing on a par with rivals like Kroger Co. and Safeway Inc. amid fierce competition and rising prices for key staples like milk, produce and meat.
The Minneapolis-based operator of Albertsons, Jewel-Osco and Save-A-Lot grocery stores, which has been cutting prices, reported fiscal fourth-quarter net income of $95 million, or 44 cents per share, compared with a year-earlier profit $97 million, or 46 cents per share.
"This provides us a foundation to continue to deliver upon our business transformation plan as we move into fiscal 2012," Craig Herkert, SuperValu's chief executive officer and president, said in a statement.
Revenue slipped to $8.7 billion, from $9.2 billion a year earlier.
Gross margin in the fourth quarter was $2.02 billion, or 23.3 percent of net sales, compared with $2.16 billion, or 23.4 percent of net sales last year.
The company also forecast full-year net earnings in the range of $1.20 per share to $1.40 per share.
Shares of SuperValu were trading at $10.25 in premarket trading Thursday, up from their New York Stock Exchange close of $9.08.