Supervalu Inc. (SVU) one of the largest grocery chains in the United States, reported fourth-quarter 2011 earnings. The quarterly earnings of 44 cents a share outpaced the Zacks Consensus Estimate of 34 cents by 29.4%. However, on a year-over-year basis earnings plunged 29.0%
The company now expects fiscal 2012 GAAP earnings to be in the range of $1.20 to $1.40 per share, which is above the Zacks Consensus Estimate of $1.17.
Revenue and Margins
Supervalu’s total sales dipped 5.9% to $8,673 million in the quarter, compared with $9,205 million in the prior-year period. The reported revenue fell short of the Zacks Consensus Estimate of $8,751 million.
Supervalu’s gross margin was almost flat year-over-year contracting 10 basis points to 23.3% on account of a shift in business segment mix and rise in promotional expenditure.
Segment Details
Net sales at Retail Food (77.0% of the total sales in the quarter) slipped 7.1% to $6,694 million in the quarter compared to $7,206 million in the prior-year quarter. Results followed an identical store sales decline of 5.0% and the adverse impact of retail market exits.
Retail square footage dipped 1.7% year over year in the quarter. However, excluding the impact of market exits and store closures, retail square footage grew marginally by 1.7% in the quarter.
Net sales at Supply Chain Services (23.0% of the total sales in the quarter) increased 1.6% to $1,966 million in the quarter compared with $1,999 million in the prior-year quarter.
Other Financial Update
Supervalu exited the year with cash and cash equivalents of $172 million and long-term debt and capital lease obligations of $6,348 million with a shareholders’ equity of $1,340 million.
The company’s cash flow from operations were $1,163 million for fiscal 2011, down compared with $1,474 million in the prior year, demonstrating lower earnings.
Supervalu spent $604 million in the year versus $691 million in the prior year.
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