Big purchase will help Supervalu compete

Article Excerpt

SUPERVALU INC. $36 (New York symbol SVU; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 207.8 million; Market cap: $7.5 billion; WSSF Rating: Average) is the third-largest food retailer in the United States, behind Wal-Mart and Kroger. Its 2,500 stores account for 80% of its sales. The remaining 20% comes from its food wholesale operations, which supply about 2,200 grocery stores in 48 states with brand-name and private-label goods. Supervalu’s sales have hovered around $20 billion for the last five years (fiscal years end February 28). Profits rose from $1.80 a share (total $240.7 million) in 2002 to $2.36 a share ($334.2 million) in 2005, but slipped to $2.26 a share ($322.2 million) in 2006. Acquisition more than doubled sales In June 2006, the company participated in the buy-out of the Albertsons supermarket chain. It wound up paying $11.3 billion in cash, stock and debt for over 1,120 stores. The acquisition expanded Supervalu’s presence in the west, and more than doubled its annual sales…

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