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Supervalu Slips To Loss In Q4, Projects FY13 Earnings Above View; Shares Surge


Grocery retailer Supervalu, Inc. (SVU) reported Tuesday a loss for the fourth quarter, reflecting non-cash goodwill and intangible asset impairment charges as well as lower revenues. Adjusted net earnings exceeded analysts' expectations, while revenues came in below their view. The company also forecast fiscal 2013 earnings per share above analysts' expectations. Supervalu shares rose more than 12 percent in the morning trade.

For fiscal 2012, the company posted a narrower net loss. Excluding certain items, Supervalu reported net profit of $1.25 per share. Further, Supervalu stated that as it moves into fiscal 2013, it sees another year of improving identical store sales.

Craig Herkert, the company's chief executive officer and president said, "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."

The Eden Prairie, Minnesota-based company's fourth-quarter net loss was $424 million or $2 per share, compared to a net income of $95 million or $0.44 per share reported last year.

Results for the recent quarter included non-cash goodwill and intangible asset impairment charges of $2.32 per share and employee-related costs of $0.06 per share, related to a previously announced reduction in workforce.

Adjusted net earnings for the recent quarter were $81 million or $0.38 per share. On average, 16 analysts polled by Thomson Reuters expected earnings per share of $0.35 for the quarter. Analysts' estimates typically exclude one-time items.

Net sales for the quarter declined to $8.23 billion from $8.66 billion in the same quarter last year, which also came below analysts estimate of $8.31 billion. The company attributed the decline in net sales mainly to identical store sales of negative 1.9 percent and previously announced store closures and sale of fuel centers.

Retail food net sales were $6.4 billion, lower than $6.7 billion in the prior year. Independent business net sales decreased 5.5 percent to $1.9 billion.

Gross profit margin was $1.9 billion, or 22.8 percent of net sales, compared to $2 billion or 23.3 percent of net sales last year, reflecting retail price investments, additional advertising expense, and changes in business segment mix.

For the fiscal ended February 25, 2012, the company's net loss was $1.04 billion or $4.91 per share, narrower than $1.51 billion or $7.13 per share a year ago. Adjusted for non-cash goodwill and intangible asset impairment charges, full year net earnings were $265 million or $1.25 per share. Net sales dropped to $36.1 billion from $37.53 billion in the preceding year.

Looking ahead to fiscal 2013, the company expects earnings per share to be in the range of $1.27 to $1.42, while 19 analysts project full-year earnings of $1.19 per share.

SVU is currently trading at $5.97, up $0.65 or 12.24 percent, on a volume of 9.74 million shares, against a three-month average volume of 6.55 million shares.

by RTTNews Staff Writer

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