Supervalu Inc.’s shares plunged in after-hours trading because the grocery chain reported a dismal first quarter, suspended its dividend and announced plans for “strategic alternatives.”

“Our review ... will be broad-based and include looking at the sale or other disposition of all or part of the company,” CEO Craig Herkert wrote in a letter to employees, according to Minneapolis media reports. (Supervalu is based in suburban Eden Prairie, Minn.) Bankruptcy, however, is not part of the review, Herkert told analysts.

Some analysts have said that Supervalu could be a merger-acquisition target because of its strong cash flow and cheap share prices.

Supervalu employs about 1,000 people at the Boise offices it inherited in its purchase of Albertsons Inc., in addition to more than 2,300 employees at 33 Albertsons stores around the state.

When Supervalu bought Albertsons, it kept the stores it wanted — including all of the chain’s Idaho locations — and spun off the rest to a new, privately held company called Albertsons LLC, which is based in Boise but has no stores in the state.

The company has about 4,400 grocery stores in the U.S., under names such as Albertsons, Cub Foods and Sav-A-Lot.

Supervalu has worked for years to turn around its struggling business. It was an industry laggard prior to the recession and was just getting its revamp ready as the economy crumbled. Supervalu brought in Herkert, a former Wal-Mart executive, in 2009 to help shake things up. The grocer subsequently put a heavier emphasis on lower prices and tried to position itself as a neighborhood store to draw new shoppers and keep regular customers.

Despite its efforts, it has been unable to keep up with the intense price competition fostered by the tough economic environment.

It’s possible. Supervalu plans to trim $250 million in administrative and operational expenses over the next two years. Just last month it announced plans to eliminate as many as 2,500 positions at 247 Albertsons stores in California and Nevada, but none in Idaho.

They might see some better deals. Herkert said that the chain remains profitable but that the poor quarter will result in sweeping changes to its strategy.

As such, Supervalu said it will become more aggressive in lowering prices, paying down debt and investing in its stores, all while trying to lower its own expenses.

“These are bold but necessary moves, which will position Supervalu for success in this increasingly competitive environment,” Herkert said in a statement.

The company remains saddled with debt from its $12 billion Albertsons acquisition.

Supervalu began to show signs of improvement in its fourth quarter but reported Wednesday that its fiscal first-quarter profit fell 45 percent. Revenue tumbled as it sold off gas stations and lost customers to competitors offering lower prices. Shares fell 26 percent after hours on the news.

Supervalu said it earned $41 million, or 19 cents per share, for the quarter that ended June 16. That is down sharply from the $74 million, or 35 cents per share, earned in the same quarter last year. It’s also well below the 37 cents per share that analysts had expected, according to FactSet. Revenue dropped to $10.59 billion from $11.11 billion — analysts’ average estimate was $10.61 billion.

The company plans to slash capital spending to a range of $450 million to $500 million from $675 million. It also hopes to cut debt by $450 million to $500 million this year and pay down $400 million in each year following.

The company is suspending its quarterly dividend but said it will review it annually. It also withdrew all previous earnings projections for the year, in light of the changes.

Standard & Poor’s Rating Services put Supervalu’s ratings on review for downgrade on the news. The rating agency said charging lower prices could hurt the grocer’s future profitability. S&P already has a junk-grade B+ corporate credit rating on the company.

Supervalu’s shares fell $1.37 to $3.90 in the after-hours trading. Its stock has lost nearly 90 percent of its value over the past five years, dropping to Wednesday’s closing price of $5.29.