), one of the largest grocery chains in the US, broke even on a
per share basis for the second quarter fiscal 2013, lagging the
Zacks Consensus Estimate of 12 cents and the prior-year quarter
earnings of 28 cents a share. The weak results were due to
disappointing sales in all the segments during the quarter.
Revenues and Margins
Supervalu's total sales dipped 4.6% to $8.0 billion in the second
quarter of fiscal 2013 from prior-year sales of $8.4 billion. The
reported revenue was in line with the Zacks Consensus Estimate of
$8.0 billion. Sales were negatively impacted by lower customer
spending due to the ongoing economic challenges, aggressive
pricing by its competitors and weak identical stores sales.
Net sales at Retail Food declined 7.3% to $5.2 billion in the
second quarter of fiscal 2013, compared with $5.6 billion in the
prior-year quarter. Results were impacted by negative same-store
sales of 4.3% and sale of fuel centers.
Net sales at Save-A-Lot remained more or less flat at $973
million compared with $972 million in the prior-year quarter. The
marginal increase of 0.1% came on the back of 47 additional
stores that operated at the end of the second quarter.
Net sales at Independent business grew 1.1% to $1.87 billion in
the second quarter of fiscal 2013 compared with $1.85 billion in
the prior-year quarter, driven by an increase in sales in the
Gross margin contracted in the second quarter of fiscal 2013 on
account of higher advertising spending, competitive pricing and
changes in business segment mix.
Other Financial Update
Cash and cash equivalents of Supervalu, as of September 8, 2012,
were $148 million, compared with $151 million as of June 16,
2012. Long-term debt and capital lease obligations were $6.1
billion as of September 8, 2012 compared with $6.0 billion as of
June 16, 2012.
The company intends to add 20 additional Save-A-Lot stores in
fiscal 2013. The company also plans to bring down capital
expenditure to a range of $450.0 to $500.0 million in fiscal 2013
and reduce debt by $400.0 to $450.0 million in fiscal 2013.
A peer of
Marks & Spencer Group PLC
), Supervalu Inc. has been generating weak results for the past
two quarters. However, the company has embarked on several
initiatives that will help it to maintain financial flexibility,
price its goods at par with its competitors, as well as reduce
costs in fiscal 2013.
Supervalu Inc. carries a Zacks #3 Rank that translates into a
short-term 'Hold' rating. Longer-term, we are maintaining our
Neutral recommendation on Supervalu Inc.
(MAKSY): ETF Research Reports
SUPERVALU INC (SVU): Free Stock Analysis
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