Minneapolis-based Supervalu has reported second-quarter fiscal 2014 net sales of $3.95 billion and net earnings of $40 million, beating Wall Street estimates.
Supervalu reported a continued reduction in the rate of sales decline in retail food and Save-A-Lot, and said identical store sales for corporate stores in the Save-A-Lot network improved 4.6 percent for the quarter.
“Similar to what we outlined in the first quarter, we remain focused on delivering steady improvements in our business each and every quarter,” said Sam Duncan, Supervalu's president and CEO. “While our end goal won’t be achieved overnight, I am encouraged with our results this quarter and, more importantly, the way we are achieving these results by building a strong foundation that is focused on our customers.”
Its second-quarter profit was a vast improvement from a year-earlier loss of $111 million.
Second-quarter net sales were $3.95 billion compared to $3.94 billion last year, an increase of 0.2 percent. Total sales within the independent business segment decreased 1.6 percent. Identical store sales in the Save-A-Lot network were negative 0.3 percent, while identical store sales in the retail food segment were negative 0.9 percent.
Save-A-Lot operating earnings in the second quarter were $32 million, or 3.3 percent of net sales, and included a $5 million pre-tax charge related to a legal settlement. When adjusted for this charge, Save-A-Lot operating earnings were $37 million, or 3.7 percent of net sales.
Second-quarter retail food net sales were $1.07 billion compared to $1.09 billion last year, a decline of 1.1 percent, primarily reflecting identical store sales of negative 0.9 percent. The sequential improvement in identical store sales was driven by the impact of incremental price investments, the company said.
Retail Food operating earnings in the second quarter were $7 million, or 0.7 percent of net sales. Last year’s retail food operating loss was $5 million, or 0.5 percent of net sales, and included $17 million in pre-tax charges primarily related to asset impairments. When adjusted for these charges, last year’s retail food operating earnings in the second quarter were $12 million, or 1.1 percent of net sales. The decline in retail food adjusted operating earnings was primarily driven by incremental investment in price and store labor partially offset by the benefit from the company’s cost-cutting initiatives and lower depreciation expense.
The company sold more than half its stores earlier this year, including Albertsons, Acme, Jewel-Osco, Shaw's and Star Market, to Cerberus Capital Management.