Supervalu Q3 Sales Down 7.7%
Supervalu Inc. reported third quarter fiscal 2011 retail food net sales of $6.6 billion, compared to $7.1 billion last year, a decrease of 7.7 percent.
The drop reflects the impact of same-store sales dropping 4.9 percent and previously announced market exits. Sales performance resulted from a continued challenging economic environment and heightened competitive activity, company officials said.
“Our third-quarter ID sales were softer than we had anticipated. We invested heavily in promotional activities that proved to be less than effective,” said Craig Herkert, president and CEO of Minneapolis-based Supervalu. “We remain committed to aggressively paying down debt, investing in our asset base and shedding non-core operations. This coming year, we will again allocate greater capital to grow Save-A-Lot. For our traditional banners, capital spending will go toward investments in technology to support our business transformation and store remodels.”
The company reported a net loss of $202 million or $0.95 per diluted share, including charges of $252 million after-tax, or $1.19 per diluted share.
“Our performance is still not close to my expectations and we continue to take action to change the trajectory of our businesses,” Herkert said. “Through our business transformation process, we will invest in price, leverage our buying power and enhance retail execution. These measures underscore our commitment to deliver everyday value to our customers as we execute on our vision of being America’s Neighborhood Grocer.”
Retail square footage decreased 4.1 percent from the third quarter of fiscal 2010. Excluding the impact of market exits and store closures, total retail square footage increased 1 percent compared to the third quarter of fiscal 2010.
Retail food net sales in the third quarter of fiscal 2011 represented 75.8 percent of net sales compared to 77.3 percent last year. Supply chain services net sales in the third quarter of fiscal 2011 represented 24.2 percent of net sales compared to 22.7 percent last year.
Capital spending for the third quarter was $142 million compared to $156 million in the prior year. In the third quarter the company completed 20 major remodels, six minor remodels and one new traditional supermarket, as well as 39 new Save-A-Lot locations.
Management now expects a net loss in fiscal 2011 in the range of $7.19 to $7.09 per diluted share on a GAAP basis and adjusted earnings of $1.25 to $1.35 per diluted share when excluding non-cash impairment charges and other costs.