MINNEAPOLIS -- Supervalu Inc.'s first-quarter net income rose 10 percent on cost-cutting, evidence that the grocery chain's turnaround plan appears to be bearing fruit.
Earnings beat expectations, and Supervalu's stock rose more than 7 percent in premarket trading.
The operator of Albertsons and Jewel-Osco supermarkets said Tuesday that it earned $74 million, or 35 cents per share, for the quarter. That's up from $67 million, or 31 cents per share, in the same quarter last year.
Excluding 12 cents per share in charges for closing stores in Connecticut and Cincinnati and a labor dispute at its Shaw's chain, earnings were 43 cents per share. Analysts had expected 33 cents.
Supervalu's revenue fell 4 percent to $11.11 billion. Analysts expected $11.13 billion. Revenue in stores open at least a year fell 3.9 percent.
Results were helped by "new planning tools, analytics and a hyper local focus," CEO Craig Herkert said in a statement.
Supervalu, based in Minneapolis, launched a turnaround plan more than a year ago -- bringing in new management, cutting costs, lowering debt and closing stores.
The company reiterated its guidance for expect 2012 net income of $1.20 to $1.40 per share on revenue of $37 billion. Analysts expect net income of $1.23 per share on revenue of $36.75 billion.
The grocery industry has grown intensely competitive during the weak economy as operators try to lure shoppers. They've relied heavily on promotions to do this but it has come at the expense of their already-thin profit margins.