US grocer Supervalu today (14 October) posted a drop in earnings for the second quarter and cut its earnings forecast for the year, as consumers continue to be pressured by inflation and the economy.
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Net earnings for the period to 6 September fell to US$128m from $148m a year earlier.
Operating earnings also dropped, hitting US$342m from US$406m for the comparable period in 2007. Retail food operating earnings stood at $284m, against $385m a year earlier, as Supervalu spent more on promotions.
Net sales were flat, reaching $10.23bn compared to $10.16bn in the company’s fiscal 2007 year. Retail food net sales dipped from $7.98bn a year ago to $7.96bn.
The results led the operator of the Albertsons, Jewel-Osco, Shaw’s and Save-A-Lot chains to lower its earnings guidance for the full year. Supervalu said it now expected to earn $2.86 to $2.96 per share this year, down from a previous forecast of $3 to $3.16.
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By GlobalDataHowever, Jeff Noddle, Supervalu chairman and CEO, remained upbeat. “Despite weaker than expected operating results in the second quarter, we expect another record earnings per share year, with earnings in a range of $2.86 to $2.96 per share,” he said.
“As for the balance of the year, we have taken action to improve our sales performance while creating value for our customers and to reduce costs in the back half of the year.”
Commenting on fiscal 2009 guidance, Noddle added: “Our fiscal 2009 guidance anticipates third-quarter earnings per share to be slightly below the prior year and fourth-quarter earnings per share to finish strong, as merchandising initiatives and the full effect of cost reduction activities take hold, as well as the benefit of the 53rd week.”
