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Supervalu Inc. has cut its full-year profit guidance for fiscal 2017, following wider-than-expected losses in its retail and Save-A-Lot businesses.
Although new wholesale business is expected to help boost results later this fiscal year, Supervalu anticipates its adjusted EBITDA will fall about 5 percent lower than last year. Previously, the company projected a 1.5 percent decline.
During the second quarter, which ends Sept. 10, Supervalu’s retail segment experienced tougher-than-anticipated times from competitive openings and a challenging sales and operating environment, while its Save-A-Lot division sustained an unexpectedly strong blow from deeper inflation levels and lower SNAP benefit levels than in the previous quarter. These factors likely will continue to affect the second half of the company’s fiscal year.
Additionally, an aggressive rollout of store resets, although expected to benefit results the division later in the year, has impacted second-quarter performance at Save-A-Lot. Supervalu now anticipates the second-quarter identical-store sales percentage for its retail stores and for Save-A-Lot’s store network to be lower than those of the first quarter.
Supervalu continues to explore a potential Save-A-Lot spinoff.
Based in Eden Prairie, Minn., Supervalu serves 3,342 stores, composed of 1,773 locations operated by wholesale customers serviced primarily by the company's food distribution business; 1,368 Save-A-Lot stores; and 201 traditional grocery stores.