Supervalu Sales, IDs, Drop, But Still Beat Wall Street Estimates

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Supervalu Sales, IDs, Drop, But Still Beat Wall Street Estimates

Charges related to store closings were the main culprit for a drop in sales for Eden Prairie, Minn.-based Supervalu, Inc., which reported fiscal fourth-quarter sales of $10.8 billion, down $201 million from last year’s $10.3 billion. The retailer still beat Wall Street estimates, however, and shares of Supervalu jumped more than 11 percent on the news.

Net sales were $156 million, or 73 cents per share, and included charges for one-time acquisition-related costs of $9 million after-tax, or 4 cents per share. When adjusted for the charges, one-time acquisition-related costs and the benefit of the 53rd week, fourth-quarter diluted earnings per share increased 5 percent to 81 cents in fiscal 2009, vs.77 cents last year.

“It’s good to wrap up fiscal 2009 with fourth-quarter adjusted earnings per share on a comparable basis exceeding last year by 5 percent,” said Jeff Noddle, Supervalu chairman and CEO. “As we enter fiscal 2010, we anticipate a challenging economic environment, but remain focused on executing the strategic initiatives that will drive sustainable long-term sales and earnings growth. Our center-led merchandising and customer-centric marketing initiatives are on track, and our substantial remodel program has freshened our store base. Combined with improved customer service scores and our revamped and energized own-brands program, we are better positioned to deliver an enhanced value message to consumers.”

Fourth-quarter retail net sales were $8.5 billion and included an approximately $6 million benefit from the 53-week year, compared to $8.1 billion last year. When adjusted for the 53rd week, fiscal 2009 fourth-quarter retail sales were $7.9 billion, due to store closures and negative identical-store sales of 2 percent.

Fourth-quarter supply chain sales were flat at $2.3 billion, but dropped to $2.1 billion when adjusted for the extra week.

For the fiscal year, Supervalu saw sales of $44.6 billion and a net loss of $2.9 billion, or $13.51 per share.

In 2010, Supervalu expects to generate earnings per share between $2.44 to $2.59 per share, and said it plans to cut its debt by about $700 million.

“Fiscal 2010 will be a year of further investment at Supervalu,” said Noddle. “We know that consumers are placing a greater emphasis on price, and we are taking the actions necessary to strengthen our overall competitive position. While these actions will have a short-term impact on profitability, they build a better value proposition for consumers in this economic environment and provide a foundation for future robust sales growth.”