Supervalu Revenue Falls More Than Expected
January 13 2016 - 10:10AM
Dow Jones News
Supervalu Inc. on Wednesday reported a worse-than-expected 2.6%
decline in third-quarter revenue as the supermarket chain continues
to face increased competition.
Shares of Supervalu, down 35% to $6.01 over the past year, were
unchanged in premarket trading.
"We continue to operate in a challenging environment," Chief
Executive Sam Duncan said. "Improving sales is a primary focus as
we look to complete the fiscal year." Mr. Duncan has said he would
retire from the company next month after joining in early 2013.
Supervalu owns supermarket chains including Cub, Fresh Farm and
Shop n' Save, as well as a distributor arm that works with
independent grocers. As with many of its peers, Supervalu has
struggled to distinguish itself in the highly competitive
supermarket industry.
Supervalu has been left in an unappealing middle ground as
low-price, no-frills chains have attracted cost-conscious
customers, and specialty chains led by Whole Foods Market Inc. have
lured wealthier shoppers.
Last week, the company said it plans to spin off its
hard-discount division, Save-A-Lot, into its own public company.
Supervalu has said spinning off Save-A-Lot would help investors
better understand and value the low-price, no-frills chain, which
has been a rare bright spot for the company.
Save-A-Lot was responsible for 26% of the company's sales in the
most recent quarter. Supervalu didn't set a deadline for taking
Save-A-Lot public, and there is no guarantee the spinoff will
occur.
For the fiscal quarter ended Dec. 5, Supervalu's earnings fell
to $34 million, or 13 cents a share, from $79 million, or 30 cents
a share, a year prior. Excluding severance costs and expenses
related to the potential Save-A-Lot spinoff, per-share earnings
were 16 cents.
Revenue fell to $4.11 billion from $4.23 billion a year
prior.
Analysts polled by Thomson Reuters had forecast 16 cents a share
in profits on $4.16 billion in revenue.
The company said sales within its large distributor arm
decreased 3.5% to $1.9 billion. Same-store sales at its retail food
division fell 2.6% amid a 3.4% same-store drop at Save-A-Lot
stores.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
January 13, 2016 09:55 ET (14:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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