Fall In Identical Store Sales Hurts Supervalu’s Q3 sales, Sales Outlook Also Miss Estimates
By:NewsyStocks   Wednesday, January 11, 2022 10:07 AM



Chain of Grocery store operator Supervalu (SVU) announced flat adjusted earnings for the third quarter that met analysts' expectations though its revenues fell shy of estimation hurt by a 2.9 percent fall in identical store sales sending the stock to trade down. The company's earnings outlook for the full year has come in line with expectations, though revenue again failed to meet with estimation.

Third Quarter Results

The Eden Prairie, Minnesota-based company reported a GAAP net loss of $750 million or $3.54 loss per share for the third quarter compared to a net loss of $202 million or $0.95 a share in the year-ago quarter. The results were unfavorably affected by non-cash goodwill and intangible asset impairment charges. Adjusted net earnings were $50 million or 24 cents a share.

Sales slipped 4.6 percent to $8.3 billion from $8.7 billion in the previous year quarter. Street analysts expected Supervalu to earn 24 cents a share on revenues of $8.42 billion.

Gross margin witnessed slender improvements of 20 basis points to 21.7 percent from 20.5 percent, whereas selling and administration costs as a percentage of sales were 19.3 percent versus 19.9 percent in last year quarter. Supervalu blamed higher costs to the impact of sales deleveraging and higher surplus property costs, though partly offset by savings from its cost cutting measures. The company expects to continue its initiatives to reduce its cost.

Commenting on the results, the company's CEO Craig Herkert said, "Even with the ongoing difficult economic environment and pressured consumer, we continued to make progress against our plan, allowing us to invest in price to deliver everyday value and hyper local choices that meet the needs of our customers in the diverse neighborhoods we serve."

Outlook

For the fiscal year 2012, Supervalu estimates adjusted earnings of $1.20 - $1.30 a share on sales of $36.1 billion, while GAAP loss is projected at $2.58 - $2.48 loss per share. The company believes that its decision to implement retail execution and position itself for greater value will yield better results in 2013. Street analysts project earnings of $1.25 a share on revenues of $36.50 billion.

Our Take

The identical store sales impacted its revenue numbers though its operating efficiency enabled Supervalu to meet analysts' adjusted earnings expectations. For the fiscal year too, the company's sales projection fall shy of estimation triggering a sell off of the stock.


 

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