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Supervalu Struggles Continue Despite Store Sell Off

Thursday April 25th, 2013 - 2:42PM


For fiscal 2013, supermarket operator and distributor Supervalu Inc. reported net sales of $17.1 billion and a net loss from continuing operations of $263 million, or $1.24 per diluted share, versus net sales of $17.34 billion and net loss of $110 million, or 52 cents per diluted share, in the year earlier. When adjusted for charges, net loss from continuing operations in fiscal 2013 was $76 million, or 36 cents per diluted share, the company stated.

Prior to those adjustments, net loss included $187 million in after-tax charges, or 88 cents per diluted share, primarily related to non-cash asset impairments, employee-related costs and store closure expenses from the sale of the Supervalu’s Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market supermarkets and related Osco and Sav-on in-store pharmacies.

Full year identical store sales for the Retail Food segment were negative 2.4%. Full year Save-A-Lot network idents were negative 3.3%.

For the fourth quarter, Supervalu posted net sales of $3.89 billion and a net loss of $1.41 billion, or $6.65 per diluted share.

Net loss from continuing operations for the quarter was $179 million, or 85 cents per diluted share, including $149 million in after-tax charges, or 71 cents per diluted share. Adjusted for the charges, fourth quarter loss from continuing operations was $30 million, or 14 cents per diluted share. The adjusted loss widely missed a published average analyst earnings estimate.

In the fiscal 2012 fourth quarter, net loss from continuing operations was $42 million, or 20 cents per diluted share, and included $47 million in after-tax charges, or 22 cents per diluted share, primarily related to non-cash asset impairment charges and employee severance. When adjusted for the relevant charges, 2012 fourth quarter earnings from continuing operations were $5 million, or two cents per diluted share.

Idents slipped 4.1% for Retail Food and 2.6% for Save-A-Lot.

Sam Duncan, Supervalu president and CEO, noted, in comments on the financial results, “This past quarter was largely about transitioning the company for the future, and I am proud of the many things we accomplished in my first 60 days. I brought in Ritchie Casteel as Save-A-Lot’s new president and CEO, and he has already right-sized that organization’s overhead and, along with me, met with a number of licensees to understand what we can do to help drive sales and improve the overall operating model. In the Independent Business, I am very pleased that Janel Haugarth will continue to lead this very important part of our company and am especially grateful for the support we have received from our retailers. I have talked and visited with a number of them and we have established a new National Retailer Advisory Group to facilitate feedback and information sharing.”

Duncan added, “Our banner presidents and their leadership teams are in place and have begun to execute on our decentralized model, with greater autonomy and accountability. They are energized by this change and excited to drive sales and cash in their stores. We have taken the necessary steps to right size our corporate overhead and move specific responsibilities into our business segments. Simplifying our technology needs is an important part of the strategy going forward, and Randy Burdick, our new executive vice president, chief information officer, has a proven history of success that he brings to Supervalu. Also key to the management team as we strive to improve our fresh offerings and drive private label growth are Mark Van Buskirk, executive vice president merchandising, marketing and pharmacy and Steve Fox, senior vice president, food merchandising.”