Albertsons 2005 Annual Report Download - page 3

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Dear Shareholder:
Fresh thinking. The tradition of innovation it inspires has
guided SUPERVALU for well beyond a century. This year, we
celebrate our 135th year in business. In this spirit of celebration,
historical accomplishment and future promise, I’m proud to
report that SUPERVALU’s business operations delivered another
very good year in fiscal 2005.
During fiscal 2005, SUPERVALU made significant
progress across all of our operations and further strengthened our
financial condition. We also took some bold steps, forging ahead
with several initiatives that will help set the table for the
company’s next phase of growth as we head into fiscal 2006 and
beyond.
As always, a number of macro factors, both economic and industry-related, impacted our
industry and put our strategic and operating discipline to the test. Fuel prices continued to hit
new highs, impacting our customers’ outlook, their budgets, and the mix of items purchased.
Food inflation also continued to increase across most product categories, with the largest
increases for the year occurring in perishable categories such as meat, dairy, bakery and deli.
Against this backdrop, SUPERVALU kept its strategic focus and fiscal discipline,
delivering another strong year. In fiscal 2005, we reported:
• Sales of $19.5 billion
• Net earnings of $385.8 million
• Diluted earnings per share of $2.71
• Debt-to-capital ratio of 40.1 percent
In fact, fiscal 2005 produced a triple play. SUPERVALU generated a net earnings record
of $385.8 million, including $68.3 million from the sale of the company’s minority interest in
West Coast retailer WinCo Foods, Inc. SUPERVALU also delivered double-digit diluted
earnings per share growth of 35 percent or 16 percent after eliminating the gain on the sale of
WinCo and fiscal 2004’s extra week of results. And we reduced our debt-to-capital ratio to
approximately 40 percent—the lowest in more than a decade.
Key Accomplishments
The company’s performance in 2005 benefited from several key initiatives designed to
further enhance the viability of our retail offerings and drive efficiency in our supply chain
business.
In retail, improving the strength of our retail fleet was a central theme in fiscal 2005 and
our activity largely focused on an aggressive program of store remodels and merchandising
innovation. Our commitment to remodeling our corporate retail network is virtually complete