) is slated to release its second quarter of fiscal 2013 results
before the opening bell on October 18, 2012. The Zacks Consensus
Estimate for the second quarter is pegged at 13 cents
(year-over-year decline of 53.6%) on revenues of $8.04 billion
(year-over-year decline of 4.6%).
First Quarter Recap
Supervalu, one of the largest grocery chains in the U.S.,
reported first quarter fiscal 2013 earnings per share of 19 cents,
missing the Zacks Consensus Estimate by 50% and the prior-year
quarter earnings by 45.7%. The lower-than-expected results were due
to sluggish sales in the quarter.
Supervalu's total sales dipped 4.5% to $10.6 billion in the
first quarter of fiscal 2013 from prior-year sales of $11.1
billion. Revenue also missed the Zacks Consensus Estimate of $10.9
billion. Lower customer spending due to the ongoing economic
challenges, aggressive pricing by competitors and decline in same
store sales negatively impacted the company's sales.
Agreement of Estimate Revisions
Over the past 30 days, only 1 of the 12 analysts covering the
stock revised their earnings estimate for the second quarter of
fiscal 2013. The revision was in the downward direction. None of
the analysts revised their estimates in the opposite direction.
Likewise, for fiscal 2013, only 1 of the 13 analysts changed
their estimate in the negative direction over the past 30 days.
None of the analysts have revised it in the opposite direction.
The downward revision in estimates can be attributed to the
burden of rising input costs along with consistently declining same
Magnitude of Estimate Revisions
The Zacks Consensus Estimates for the second quarter and fiscal
year 2013 have remained static over the past 30 days at 13 cents
and 66 cents per share, respectively.
Supervalu has surpassed earnings estimates in two of the last
four quarters. It has met the earnings estimate in one quarter,
while missing it in another quarter. The earnings surprise ranges
from a negative 50.0% to a positive 40%, with the average earnings
surprise being negative 0.48%.
We feel that Supervalu and its peers are facing tough times due
to low disposable income of consumers. Moreover, the U.S. 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 faces stiff competition from
Wal-Mart Stores Inc.
The Kroger Co.
). Currently, we have a Neutral recommendation on the stock.
Further, Supervalu holds a Zacks #3 Rank (short-term Hold
KROGER CO (KR): Free Stock Analysis Report
SUPERVALU INC (SVU): Free Stock Analysis Report
SAFEWAY INC (SWY): Free Stock Analysis Report
WAL-MART STORES (WMT): Free Stock Analysis
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