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Supervalu Inc. continues to firm up its financial footing, but its third-quarter report brings some good news.
While overall net sales were down for Q3 of fiscal 2014, operating earnings were up across all segments compared to a year ago, while Save-A-Lot corporate and network stores reported same-store sales gains.
"Although we are less than a year removed from the sale of five of our retail banners, Supervalu has made positive strides in all three of our business segments to better position the company for financial growth and improved shareholder value," said Sam Duncan, Supervalu CEO. "Although we still have work to do to improve our sales trajectory, I am pleased with the accomplishments we made within our operations this quarter and look forward to completing my first fiscal year leading this company."
Adjusted Q3 net earnings from continuing operations were $35 million, or 13 cents per diluted share. Q3 net sales were $4.01 billion, compared to $4.05 billion last year, a decrease of 1 percent. Identical-store sales in the Save-A-Lot network were up 1.7 percent, while same-store sales for the hard discounter's corporate stores were up 5.4 percent. Meanwhile, same-store sales in the Retail Food segment were down 1.9 percent, with total sales within the Independent Business segment falling 3.7 percent.
Q3 adjusted gross profit was $572 million, or 14.3 percent of net sales. Last year’s third quarter gross profit was $530 million, or 13.1 percent of net sales.
Independent Business net sales were $1.91 billion in Q3 compared to $1.99 billion a year ago, a decrease of 3.7 percent, which Supervalu blames on lower sales to existing customers, including military, and two larger lost customers partly offset by net new business. Independent adjusted operating earnings were $57 million, or 3 percent of net sales, versus $51 million a year ago.
Q3 Save-A-Lot net sales were $991 million compared to $966 million last year, an increase of 2.6 percent, reflecting the impact from network identical store sales of positive 1.7 percent. Save-A-Lot operating earnings for the quarter were $40 million, or 4.1 percent of net sales.
Retail Food net sales were $1.06 billion in Q3 compared to $1.09 billion last year, a decline of 2.6 percent, primarily reflecting identical store sales of negative 1.9 percent. Retail Food adjusted operating earnings were $23 million, or 2.2 percent of net sales.
Minneapolis-based Supervalu Inc. operates a network of 3,358 stores composed of 1,834 independent stores serviced primarily by the company’s food distribution business, 1,334 Save-A-Lot stores, of which 954 are operated by licensee owners; and 190 traditional retail grocery stores.