US: Supervalu Q2 earnings down, cuts forecast

21 October 2009 | Source: just-food.com

US supermarket group Supervalu Inc cut its full-year earnings on Tuesday (20 October) as it struggled to gain traction with shoppers.

The Minneapolis-based company said it earned US$74m for the second quarter, down from $128m a year earlier.

Revenue fell 7.5% to $9.46bn. Second-quarter retail food net sales dropped to $7.4bn from $8bn in the previous year, reflecting a 4.8% drop in identical-store sales and store closures.

CEO Craig Herkert said: "Consumer purchasing behaviour, deflationary pressures, as well as our decision to make meaningful investments in price and promotions significantly impacted our second quarter sales and margins."

The company said it now expects fiscal-year earnings per share of $2.01 to $2.11, compared with a prior forecast of $2.01 to $2.21. Both the current and prior forecasts exclude costs related primarily to store closures.

Supervalu expects same-store sales to fall about 4%, versus a prior forecast for a decline of about 3%.

Click here for the results release and click here for insight comment from Supervalu's Q2 conference call.