US retail giant Supervalu has clawed itself out of the red for its fiscal third-quarter, but sales dropped 5% due to a “distressed” consumer climate.
Net sales for the 12 weeks to 1 December fell by 5% on the same period of last year, to US$7.9bn, said Supervalu today (10 January).
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The group blamed the drop on weaker same-store sales, amid a poor consumer environment and an increasingly “competitive environment”; both of which has forced it to invest more in promotions.
Sales in retail food for the third quarter were 7.4% down on the prior-year period, at $4.96bn.
There was better news at the bottom line, where Supervalu scraped back into profit. It was back in the black by $16m for the quarter, thanks to a one-off after-tax gain of $26m, versus losses of $750m in the same three months of last year. Operating profits were $157m, versus losses of $708m a year ago.
However, the group remained in the red over the first nine months of its fiscal year. It did, though, cut nine-month losses to $54m, from $616m a year earlier.
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By GlobalDataToday’s announcement coincided with news that Supervalu has agreed to sell five of its retail chains – Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market – to an investor consortium led by private equity group Cerberus Capital. The deal is valued at $3.3bn.
The firm did not provide outlook guidance on sales and profits, other than to say that it expects to have cut net debt by $400m in its current fiscal year.
