Supervaluposted a higher quarterly profit Tuesday as reduced employee-related costs helped offset slowing sales.
The company, which acquired most of Albertsons grocery stores June 2, 2006, also stood by its full-year earnings forecast. However, it said sales at "identical stores" -- or at outlets open more than a year, excluding acquisitions and replacement stores -- would be at the low end of its 1 percent to 2 percent growth forecast.
Shares of the company jumped Tuesday almost 7 percent.
The grocer, whose shares rose to $36 in pre-market electronic trading Tuesday from Monday's $35.24 New York Stock Exchange close, said earnings rose to $148 million, or 69 cents a share, in the second quarter ended Sept. 8 from $132 million, or 61 cents a share, a year earlier.
Analysts, on average, had been expecting it to earn 68 cents per share, according to Reuters Estimates.
Quarterly sales declined to $10.2 billion from $10.7 billion last year. Supervalu said the decrease was due to one less week of acquired operations in the quarter compared with a year ago, and it estimated the lost sales impact of that week at roughly $450 million.
Identical store sales, excluding fuel, rose 0.5 percent, the company said.
Profit in its retail division rose 6.7 percent to $385 million, boosted by lower employee-related costs, less depreciation expense and other factors, the company said.
"Margins improved, showing some of the benefits from the acquisition on the profitability side," said Mitchell Corwin, analyst at Morningstar, adding that the tepid sales had been expected.
For the full year, the company said it still expects earnings per share of $2.93 to $3.03, excluding acquisition costs of 20 cents per share. Including costs, it forecast earnings per share of $2.73 to $2.83.
Analysts, were expecting it to earn $2.77 per share, excluding items, according to Reuters Estimates.