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Supervalu Inc. reported net sales losses for the fourth quarter and entire 2012 fiscal year, though the Minneapolis-based grocer’s chief executive still said he was “pleased” with the results of the company’s current strategy.
Supervalu had full-year net sales of $36.1 billion and a net loss of $1.04 billion, compared to FY 2011, when the company reported sales of $37.5 billion and a $1.5 billion loss. Q4 net sales were $8.2 billion with a loss of $424 million, compared to sales of $8.7 billion and net earnings of $95 million for the year-ago quarter.
“I am pleased with the launch of our business transformation this year and the initial results from that strategy which helped us deliver our adjusted earnings results of $1.25 for fiscal 2012,” said Craig Herkert, Supervalu’s CEO and president. “Our disciplined approach to pre-funding price investments is allowing us to invest across markets, categories and items. We remain focused on delivering improved value for our customers and meeting the specific needs of each community we serve.”
When adjusted for the non-cash goodwill and intangible asset impairment charges and employee-related costs, Q4 2012 net earnings were $81 million or 38 cents per diluted share.
Q4 retail food net sales were $6.4 billion compared to $6.7 billion last year. The change in net sales primarily reflects a 1.9 percent drop in same-store sales, previously announced store closures and the sale of fuel centers. Gross profit margin for the fourth quarter was $1.9 billion, or 22.8 percent of net sales, compared to $2 billion or 23.3 percent of net sales last year.
Independent business operating earnings in the fourth quarter were $44 million, or 2.3 percent of net sales, and included $5 million in pre-tax employee-related costs for a previously-announced reduction in workforce. Last year’s independent business operating earnings were $120 million, or 6.1 percent of net sales.
Year-to-date capital expenditures were $711 million compared to $604 million for the same period last year.
“We are committed to fair price plus promotions and will intensify our efforts as we enter the second year of our business transformation,” Herkert said. “As we move into fiscal 2013, we see another year of improving identical-store sales and will continue to take appropriate steps to deliver greater value to our customers and move closer to becoming America’s Neighborhood Grocer.”
For FY 2013, Supervalu projects net sales of up to $35.5 billion, which includes the reduction of approximately $500 million in sales from the sale of fuel centers. Same-store sales, excluding fuel, are projected to drop 1 to 2 percent. Sales in the independent business segment are expected to rise “modestly.”
Supervalu Inc. operates 4,300 stores composed of 1,102 traditional retail stores, including 797 in-store pharmacies; 1,332 hard-discount stores, of which 935 are operated by licensee owners; and 1,900 independent stores serviced primarily by the company’s traditional food distribution business.