Stock Market Watch

SuperValu Slashes Outlook as Sales Drop (SVU)

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SupervaluSuperValu Inc. (NYSE: SVU) today slashed its outlook for the full fiscal year as second-quarter sales dropped. The company’s shares have fallen sharply following the downward revision.

At last check, SuperValu shares were trading 5.88% lower at $7.69 on above average volume of 11.65 million. It touched an intra-day low of $7.63.

SuperValu, which operates a grocery-chain, lowered the high-end of its full-year earnings estimate by $0.10 per share. The company now expects full year earnings to come in between $1.20 per share and $1.30 per share. The company also slashed its full-year revenue guidance to $36.5 billion from $37 billion.


Full-year same-store sales are expected to fall 2%-2.5%. This compares with previous guidance of a decline of 1.5%-2.5% in same-store sales. CEO Craig Herkert said that midway through the fiscal year, the company has more clarity on earnings performance and has tightened guidance to reflect its outlook.

Eden Prairie, Minnesota-based SuperValu also reported its second-quarter financial results. The company reported second-quarter profit of $60 million, or $0.28 per share. For the same period in the previous year, the company had posted a loss of $1.47 billion, or $6.94 per share. Excluding one-time items, the company’s earnings in the previous year were $0.28 per share.

However, SuperValu’s sales for the second quarter fell 2.6% to $8.43 billion. The company’s same-store sales for the second quarter dropped 1.8%. This is the fourteenth straight quarter where the company has seen a drop in its same-store sales. The decline in same-store sales reflects the company’s struggle with rising food costs and competition from lower-priced rivals.

CEO Herkert said that as the company’s 8 Plays to Win strategy is gaining traction and it remains on plan with its business transformation. Herkert added that as the company moves into the second half of the fiscal year, it remains focused on its strategy and meeting the needs of its customers.

edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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