Shares in Supervalu Inc slumped yesterday (11 January) after the US retailer issued a profit warning amid more write-downs and poorer sales in its third quarter, which led to a loss of US$750m.
Supervalu’s stock closed down over 12% on the New York Stock Exchange after it said it now expected to record a loss of $2.48-2.58 per diluted share for its financial year.
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In October, when the retailer posted its second-quarter results, it forecast earnings per share of $1.20-1.30.
In the second quarter, Supervalu booked goodwill and intangible asset impairment charges of $1.52bn. In its third quarter to 3 December, Supervalu ran up charges of $800m, linked to its move to restructure its operations and close stores.
The costs led to a quarterly loss of $750m. A year earlier, Supervalu has posted net income of $202m due in part to more charges in that quarter. Excluding charges in both periods, net earnings were $50m in the two quarters.
Supervalu’s bottom line was also hit by falling sales in its third quarter. Food retail net sales fell from $6.6bn a year earlier to $6.3bn due to store closures and a 2.9% drop in identical-store sales.
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By GlobalDataDespite the falling sales, worsening bottom line and profit warning, Supervalu CEO and president Craig Herkert said the retailer was making strides in its plans to “transform” the business.
“Even with the ongoing difficult economic environment and pressured consumer, we continued to make progress against our plan, allowing us to invest in price to deliver everyday value and hyper local choices that meet the needs of our customers in the diverse neighbourhoods we serve,” Herkert said.
