Grocery retailer Supervalu, Inc. (SVU) on Wednesday reported a loss for the fourth quarter that widened from last year, reflecting a hefty loss from discontinued operations and lower sales across all its segments.
Supervalu has been facing rough weather lately, as customers switch over to Wal-Mart Stores, Inc. (WMT) and Kroger Co. (KR), seeking lower prices. The stiff competition and higher costs have hurt the company's bottom line. Supervalu is now trying to curb costs to aggressively lower its prices and improve customer satisfaction.
Minnesota-based Supervalu noted that due to the sale of five retail grocery banners - Albertsons, Acme, Jewel-Osco, Shaw's and Star Market stores and related Osco as well as Sav-on in-store pharmacies - on March 21, 2013, their results are presented as discontinued operations for all periods.
The company's loss from discontinued operations for the latest quarter was $1.23 billion or $5.80 per share, wider than loss from discontinued operations of $382 million or $1.80 per share in the prior-year quarter.
Retail Food net sales for the quarter decreased 4 percent to $1.09 billion, reflecting the decline in identical store sales, driven by competitive pressures in certain markets and a lower level of promotional spending.
Save-A-Lot net sales declined 2 percent from the year-ago period to $969 million, reflecting the impact from network identical store sales of negative 2.6 percent partially offset by the benefit from net new store openings.
Independent business net sales decreased 1 percent from last year to $1.83 billion, primarily due to lower level of new business during the quarter that resulted from a challenging affiliation environment since the company announced it would review strategic alternatives.
Supervalu's gross margin declined to 14.1 percent from 14.4 percent last year, reflecting investment in competitive pricing partly offset by lower promotional spending.
Supervalu's fourth-quarter net loss was $1.41 billion or $6.65 per share, wider than loss of $424 million or $2.00 per share in the year-ago period.
Loss from continuing operations widened to $179 million or $0.85 per share from $42 million or $0.20 per share a year ago. The latest quarter's results include after-tax charges of $149 million, or $0.71 per share, primarily related to non-cash asset impairment charges and employee severance.
Adjusted loss from continuing operations was $30 million or $0.14 per share, compared to adjusted earnings from continuing operations of $5 million or $0.02 per share. On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.18 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined 2 percent to $3.89 billion from $3.98 billion in the same period last year. Analysts had a consensus revenue estimate of $7.86 billion.
The lower net sales primarily reflects a decline in identical store sales of negative 4.1 percent for Retail Food and negative 2.6 percent for Save-A-Lot network.
For fiscal 2013, Supervalu's net loss widened to $1.47 billion or $6.91 per share from $1.04 billion or $4.91 per share in the prior year. Adjusted loss from continuing operations was $76 million or $0.36 per share, compared to adjusted earnings of $10 million or $0.04 per share in the previous year.
Net sales for the year declined to $17.10 billion from $17.34 billion last year.
Analysts expected the company to earn $0.42 per share for the year on revenues of $34.43 billion.
In Wednesday's regular trading session, SVU is trading at $5.19, down $0.18 or 3.26 percent on a volume of 800,072 shares.
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