Price Investments Hinder Supervalu Profits
Tuesday, October 21, 2014 at 2:02PM October 16, 2014
Supervalu president and CEO Sam Duncan is encouraged with the progress the retailer is making and why not. Identical store sales in the company's Save-A-Lot units were up 6.5% in the second quarter.
The company's total sales for the period ended September 6, increased 1.8% to $4.02 billion while profits declined to $31 million, or 11 cents a share, from $40 million, or 15 cents a share. When adjusted for some non-recurring items, second quarter earnings were $34 million, or 13 cents a share.
"Midway through fiscal 2015, I am encouraged with the progress we have made across the business," said president and CEO Sam Duncan. "The investments we have made at Save-A-Lot continue to drive sales and our retail food stores recorded their third consecutive quarter of positive identical store sales. The addition of the Rainbow stores this past quarter is a positive for our independent business and we are encouraged by the early results."
Identical store sales in the Save-A-Lot Network increased 6.5% while identical store sales in the company's retail food segment increased 0.4%.
In Supervalu's largest segment, the independent business unit, sales were down slightly to $1.82 billion from $1.84 billion primarily due to lost accounts. The company said it lost one new Albertson's banner that completed the transition to self-distribution, a larger lost customer and lower military sales, partially offset by new business including increased sales to existing customers.
Second quarter Save-A-Lot net sales increased 8% to $1.05 billion, but operating profits fell to $26 million from $32 million the prior year due to investments in price.
Source: Retailing Today
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