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On heels of the Save-A-Lot sale, Supervalu's second quarter fiscal 2017 sales declined from the comparable year-ago period. Net sales of $3.8 billion retreated 5 percent from last year’s $4 billion while net earnings from continuing operations accounted for $30 million, or $0.11 per diluted share, down from last year’s $31 million. This includes a net $2 million after-tax gain, comprised of a fee received from a supply agreement termination and partially offset by store closure changes and costs as well as costs related to the Save-A-Lot sale.
The company's bottom line totaled $28 million, or $0.10 per share, down from $37 million, or $0.13 per share, in last year's third quarter.
“The transformation of our business continues to take time,” noted Mark Gross, president/CEO of the Eden Prairie, Minn.-based wholesaler, "but I am optimistic about our ability to grow our wholesale business by adding new customers, securing long-term supply agreements with existing customers, and expanding overall product sales to all customers. We expect wholesale sales in the second half of this year to be higher than last year as we add new customers, grow our base business, and cycle select customer losses from last year.”
Supervalu announced Save-A-Lot’s sale to Canadian Onex earlier this week, and the discount banner reported net sales of $1.06 billion for the second quarter, down 2.8 percent from last year’s $1.09 billion. The net sales decrease reflects network identical store sales of negative 5.2 percent, partially offset by new corporate and licensed stores.
Operating earnings for Save-A-Lot in the second quarter were $22 million, or 2.1 percent of net sales.
Net sales within the wholesale segment were down 5.5 percent; $1.73 billion this compared to last year’s $1.83 billion. This is due primarily to stores from the prior year no longer supplied by Supervalu. Operating earnings were $58 million or 3.3 percent of net sales, which includes a fee received from a supply agreement termination of $9 million. Adjusted operating earnings were $49 million or 2.8 percent of net sales, flat compared to last year’s 2.7 percent.
Retail net sales were $1.03 billion, down 5.4 percent from last year’s $1.09 billion. The net sales decrease reflects identical store sales of negative 5.9 percent. Operating loss in the second quarter was $12 million, or negative 1.2 percent of net sales, including $4 million in store closure charges and costs. Adjusted retail operating loss was $8 million.