As Supervalu closed on the acquisition of Unified Grocers, the supermarket retailer reported a decline in its retail division net sales in the first quarter.
For the first quarter ended June 17, Supervalu posted net earnings from continuing operations of $12 million, or four cents per diluted share, versus net earnings from continuing operations of $20 million, or seven cents per diluted share, in the quarter a year-prior.
The net earnings included $12 million of after-tax charges and costs comprised of a legal reserve charge, merger and integration costs, unamortized financing charges, debt refinancing costs and severance costs, partially offset by gains on a surplus property sale and store closures. When adjusted for such one-time items, first quarter net earnings from continuing operations were $24 million, or nine cents per diluted share. Adjusted net earnings from continuing operations in the year-previous first quarter were $22 million, or eight cents per diluted share.
Supervalu missed a Market Beat-published analyst average estimate by a penny.
Net sales were $4 billion versus $3.77 billion in the year-earlier quarter. First quarter retail division net sales were $1.39 billion versus $1.43 billion in the period a year prior. The net sales decrease arose from an identical store sales slide of 4.9% and the effect of store closures partially offset by sales from acquired and new stores. Retail operating loss in the first quarter was $4 million. It included $1 million of severance costs, which were offset by $1 million from a gain on a store closure. In the year-previous first quarter, retail operating earnings were $8 million. The impact of lower sales and higher employee costs, partially due to acquired and new store operations, drove the year over year dip.
First quarter wholesale operating earnings were $62 million including a $9 million legal reserve charge. When adjusted for the extraordinary item, wholesale operating earnings were $71 million versus $64 million, in the year-before quarter.
“The results generated this quarter by our wholesale business were outstanding and demonstrate our ability to deliver on our strategy and commitment toward growing this segment,” said Mark Gross, Supervalu president and CEO. “Additionally, we’re thrilled that we closed on the acquisition of Unified Grocers shortly after the end of our first quarter, and we’re now working together as one team to drive the business and integration efforts forward. We’ll begin reporting results in our second fiscal quarter that include the Unified business.”