SUPERVALU INC. (NYSE:SVU) today announced that it is lowering
its outlook for full-year adjusted EBITDA(1). Although
recently announced new business in its Wholesale segment is
expected to begin to positively contribute to results later this
fiscal year, second quarter business performance in its Retail and
Save-A-Lot segments has been softer than previously anticipated.
Full year adjusted EBITDA(1) is now expected to be
approximately 5.0% lower than last year.
Commenting on the outlook for fiscal 2017, President and CEO
Mark Gross said, “Although we are seeing softness in portions of
our business, I am excited and encouraged by the recent
announcements pertaining to new customers for our core Wholesale
segment and the opportunities that exist to further grow that
business. In addition to the already announced two new large
customers, we have recaptured some previously lost business from
two other customers. We look forward to adding the volume from
these new customers and do not expect any meaningful customer
losses for the remainder of this fiscal year.”
The second quarter performance of the Company’s Retail segment
has been impacted to a greater than anticipated degree by
competitive openings and a challenging sales and operating
environment for its stores. The second quarter performance of the
Company’s Save-A-Lot segment has been impacted by deeper levels of
deflation as well as lower levels of SNAP (supplemental nutrition
assistance program) benefits compared to the first quarter. These
factors affecting the Retail and Save-A-Lot segments are expected
to impact the second half of the fiscal year as well. In addition,
the second quarter performance at Save-A-Lot has been impacted by
an aggressive rollout of store resets which is expected to benefit
results at Save-A-Lot later in the year. The Company now expects
the second quarter identical store sales percentage for its Retail
stores and for Save-A-Lot’s store network will be lower than the
first quarter identical store sales percentage. The Company’s
second quarter ends September 10.
As previously announced, the Company will participate in the
Goldman Sachs Global Retailing Conference in New York on Thursday,
September 8, 2016 at approximately 11:20 a.m. (Eastern Time) and
expects to address the Company’s outlook in more detail at that
time. A live webcast of this event will be available through the
SUPERVALU website at http://www.supervaluinvestors.com (click on
microphone icon). A replay will be archived on SUPERVALU’s website
by going to the “Investors” link and clicking on “Presentations and
Webcasts.”
(1) The Company defines Adjusted EBITDA as Net earnings
(loss) from continuing operations, plus Interest expense, net and
Income tax provision (benefit), less Net earnings attributable to
non-controlling interests calculated in accordance with GAAP, plus
non-GAAP adjustments for Depreciation and amortization, LIFO charge
(credit), certain employee-related costs and pension-related
charges (including severance costs, pension settlement charges,
multiemployer pension withdrawal charges, accelerated stock-based
compensation charges and other items), certain non-cash asset
impairment and other charges (including asset write-offs, store
closures and market exits), certain gains and losses on the sale of
property, goodwill and intangible asset impairment charges, costs
related to the separation of businesses, legal settlement charges
and gains, contract breakage costs and certain other non-cash
charges or items as determined by management. These items are
omitted either because they are non-cash items or are items that
are not considered in our supplemental assessment of our on-going
business performance. Certain of these adjustments are considered
in similar supplemental analyses by other companies, such as
Depreciation and amortization, LIFO charge (credit) and certain
other adjustments. Adjusted EBITDA is less disposed to variances in
actual performance resulting from depreciation, amortization and
other non-cash charges and credits, and more reflective of other
factors that affect the Company’s underlying operating performance.
There are significant limitations to using Adjusted EBITDA as a
financial measure including, but not limited to, it not reflecting
cash expenditures for capital assets or contractual commitments,
changes in working capital, income taxes and debt service expenses
that are recurring in the Company's results of operations. The
adjustments for the Company’s first quarter fiscal 2017 include:
net earnings attributable to non-controlling interests, $(1)
million; income tax provision, $27 million; interest expense, net,
$60 million; depreciation and amortization, $86 million; LIFO
charge, $2 million; costs related to the potential separation of
Save-A-Lot, $3 million; sales and use tax refund, $(2) million. The
adjustment items occurring in the first quarter will continue for
the balance of the fiscal year, with the exception of the sales and
use tax refund. Additional non-cash or other adjustments not
related to our on-going business performance may arise during the
remainder of fiscal 2017. Adjustments for the Company’s fiscal 2017
second quarter are anticipated to include the following, a customer
contract settlement gain, severance, impairment and employee
benefit plan charges. For the second half of the year, the Company
also anticipates a pension settlement charge. Each of the
anticipated adjustments are preliminary and subject to change, and
as a result, the Company is not currently able to provide guidance
on Net earnings (loss) before continuing operations, which is the
most comparable GAAP measure to Adjusted EBITDA.
About SUPERVALU INC.
SUPERVALU INC. is one of the largest grocery wholesalers and
retailers in the U.S. with annual sales of approximately $18
billion. SUPERVALU serves customers across the United States
through a network of 3,342 stores composed of 1,773 stores operated
by wholesale customers serviced primarily by the Company’s food
distribution business; 1,368 Save-A-Lot stores, of which 896 are
operated by licensee owners; and 201 traditional retail grocery
stores (store counts as of June 18, 2016). Headquartered in
Minnesota, SUPERVALU has approximately 40,000 employees. For more
information about SUPERVALU visit www.supervalu.com.
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
Except for the historical and factual information contained
herein, the matters set forth in this news release, particularly
those pertaining to SUPERVALU’s expectations, guidance, or future
operating results, and other statements identified by words such as
"estimates," "expects," "projects," "plans," "intends," and similar
expressions are forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are subject to
risks and uncertainties that may cause actual results to differ
materially, including competition, ability to execute operations
and initiatives, ability to realize benefits from acquisitions and
dispositions, impact of exploration of possible separation of
Save-A-Lot, reliance on wholesale customers and licensees ability
to grow or maintain identical store sales, ability to maintain or
increase margins, substantial indebtedness, labor relations issues,
escalating costs of providing employee benefits, relationships with
Albertson’s LLC, New Albertson’s Inc., and Haggen, intrusions to
and disruption of information technology systems, impact of
economic conditions, commodity pricing, governmental regulation,
food and drug safety issues, legal proceedings, pharmacy
reimbursement and health care financing, intellectual property
protection, severe weather, natural disasters and adverse climate
changes, disruption to supply chain and distribution network,
changes in military business, adequacy of insurance, volatility in
fuel and energy costs, asset impairment charges, fluctuations in
our common stock price and other risk factors relating to our
business or industry as detailed from time to time in SUPERVALU's
reports filed with the SEC. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this news release. Unless legally required, SUPERVALU undertakes
no obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160908005656/en/
SUPERVALU INC.Investor
Contact:Steve Bloomquist,
952-828-4144steve.j.bloomquist@supervalu.comorMedia Contact:Jeff Swanson,
952-903-1645jeffrey.s.swanson@supervalu.com
Supervalu (NYSE:SVU)
Historical Stock Chart
From Mar 2024 to Apr 2024
Supervalu (NYSE:SVU)
Historical Stock Chart
From Apr 2023 to Apr 2024