Supervalu reports sales decrease for third quarter
Minneapolis-based Supervalu reported on Tuesday that overall sales were down 1.4 percent in the third quarter of its 2017 fiscal year, with wholesale operations boosting a drop in retail sales amid an $11 million net loss from continuing operations.
Total net sales in the third quarter were $3 billion, compared with $3.05 billion last year. Adjusted net earnings from continuing operations were $14 million, or 5 cents per diluted share, compared with $16 million a year ago.
“It is a significant accomplishment that we increased wholesale sales compared to last year, given the sales lost at the end of fiscal 2016,” said President/CEO Mark Gross. “Unfortunately, in our retail segment, we have not been able to overcome persistent deflation, competitive impacts and other factors. It takes time to change customers’ shopping habits, but our team is dedicated to improving our results. … We know we can’t change inflation or our competition.”
Subsequent to the end of the third quarter, Supervalu completed the sale of its Save-A-Lot business in early December for $1.4 billion to an affiliate of Toronto-based Onex Corp.
“The successful sale of Save-A-Lot early in the fourth quarter provides Supervalu with additional flexibility to operate and grow our business,” Gross said.
Bruce Besanko, Supervalu’s COO/CFO, said the majority of the proceeds from the sale of Save-A-Lot were used to reduce outstanding debt by approximately $1.1 billion.
Gross said Supervalu will focus on bringing more value to store brands. “We need stronger merchandising to emphasize our private label program, which we feel is best in class,” he added.
Supervalu serves customers across the United States through a network of 2,067 stores composed of 1,850 stores operated by wholesale customers serviced primarily by the company’s food distribution business, 195 traditional retail grocery stores operated under five retail banners, and 22 stores under the Shop 'N Save name in Maryland, Pennsylvania, Virginia and West Virginia.