Supervalu Inc.
(
SVU
) is slated to release its fourth quarter 2012 results before the
opening bell on April 10, 2012. The Zacks Consensus Estimate for
the fourth quarter is pegged at 35 cents (year-over-year decline of
20.10%) on revenues of $8,320 million.
The Zacks Consensus Estimate for the fiscal year 2012 is $1.23
(year-over-year decline of 11.87%) on revenues of $36,213
million.
Third Quarter Recap
Supervalu Inc.'s earnings per share (
EPS
) of 24 cents shot up 125.5% compared to a loss of 94 cents posted
in the year-ago period. The quarterly earnings were in line with
the Zacks Consensus Estimate.
Total sales dipped 3.98% to $8,327 million in the quarter,
compared with $8,673 million in the prior-year period. The reported
revenue missed the Zacks Consensus Estimate of $8,429 million.
Agreement of Estimate Revisions
Over the past 30 days, one analyst among the 13 analysts
covering Supervalu revised its estimate downward. As a result,
quarterly estimate dropped by one cent during the last 30 days.
For the fiscal 2012, although one analyst revised his estimates
downward for the last 30 days, the quarterly estimate did not
change during the period.
Surprise History
Supervalu has surpassed earnings estimates in all the last four
quarters. The earnings surprise range from a low of 0.00% to a
high of 40.00%, with the average earnings surprise being
25.16%.
Our Recommendation
We feel that the grocery chain along with its peers in the
industry is facing tough times as the global economy slows down
accompanied by low disposable income of consumers forcing them to
spend cautiously.
Target Corp.'s
(
TGT
) shift to self-distribution along with the sale of its supply
chain management subsidiary will affect sales in the coming
quarters.
Moreover, the Food and Drug Administration (FDA) is increasingly
becoming more and more vigilant regarding food and health
standards. Adverse publicity regarding food and drugs is affecting
consumer confidence and preventing them from buying the company's
products resulting in product and delivery disruptions.
Supervalu operates in a highly competitive market. Moreover,
labor unions pose inherent risks for the company and potential
labor related issues remain a concern. Supervalu faces stiff
competition from
Wal-Mart Stores Inc.
(
WMT
),
The Kroger Co.
(
KR
) and
Safeway Inc.
(
SWY
).
Currently, we have a Neutral recommendation on the stock.
Further, Supervalu holds the Zacks #4 Rank, which translates into a
short-term Sell rating.
KROGER CO (
KR
): Free Stock Analysis Report
SUPERVALU INC (
SVU
): Free Stock Analysis Report
SAFEWAY INC (
SWY
): Free Stock Analysis Report
TARGET CORP (
TGT
): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
Report
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