NEW YORK (TheStreet) -- Supervalu (SVU)  shares are soaring by 16.3% to $8.56 in Tuesday's late morning trading session after the supermarket operator announced this morning that it is considering spinning off its Save-A-Lot grocery store chain.

"Over the last two and a half years, Save-A-Lot has re-positioned its brand, re-focused its efforts on fresh produce and meat, and re-merchandised its stores and product offerings to better appeal to a broader group of customers," CEO Sam Duncan stated.

This separation allows Supervalu to focus more on its food-distribution business, Bloomberg reports. However, no specific timetable for the separation has been set, the company noted.

Additionally, Supervalu this morning reported strong fiscal 2016 first quarter results, beating analysts' estimates.

For the latest quarter, the company earned 23 cents per share on revenue of $5.41 billion. In the same quarter the previous year, the company earned 17 cents per share on revenue of $5.26 billion. 

Analysts had expected the company to report earnings of 20 cents per share on revenue of $5.39 billion.

Based in Eden Prairie, MN, Supervalu operates as a grocery wholesaler and retailer in the U.S. It owns supermarket chains including Cub, Fresh Farm and Shop n' Save.

Separately, TheStreet Ratings team rates SUPERVALU INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate SUPERVALU INC (SVU) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and increase in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

You can view the full analysis from the report here: SVU Ratings Report

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