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Supervalu Inc (SVU): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:

SUPERVALU's second-quarter fiscal 2015 earnings of $0.11 were in line with the Zacks Consensus Estimate but declined from the prior-year quarter results by 15.4%. The decline was attributed to lower margins resulting from higher operating cost. Net sales surpassed the Zacks Consensus Estimate by 2.3% and increased 1.8% year over year backed by positive identical store sales in the Save-A-Lot network and retail food segment. However we commend the company efforts to cut costs in the process of divesting its underperforming assets to cut operating costs. Moreover, it has undertaken several initiatives to improve comps in the retail sector Despite the efforts, the company continues to face macroeconomic headwinds.

Overview:

SUPERVALU Inc., founded in 1871, and based in Eden Prairie, MN, is one of the leading companies in the United States grocery business. The retail operations of the company are conducted under the banners like, Acme Markets, Shoppers Food & Pharmacy, Cub Foods, Farm Fresh, Lucky, Shop 'n Save, Scott's, Star Markets, Bristol Farms, bigg's, Hornbacher's, and Sunflower Market. The company operates through three retail food store formats - combination stores, food stores and limited assortment food stores. The combination stores refer to the combination of food and pharmacy.

SUPERVALU operates through two reportable segments: Retail food and Independent business. These divisions refer to two distinct businesses one of them is retail and the other wholesale. Each segment has a separate customer base, marketing strategy and management structure.

The Retail Food division derives revenues from the sale of groceries at retail outlets operated by SUPERVALU. The company operates its Retail food operations through 2,434 traditional and hard-discount retail food stores located throughout the United States, including 935 licensed Save-A-Lot stores.

The Independent Business division derives revenues from wholesale distribution to independently-owned retail food stores, mass merchants and other customers and logistics support services. The company's Independent business network is spread over 47 states. It serves as the primary grocery supplier to independent retail customers, the company's own stores, as well as secondary grocery suppliers.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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