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How Did Supervalu Fare with Earnings and Sales Expectations?

Sonya Bells

For What It's Worth: Supervalu's Fiscal 4Q16 Results Are In

Snapshot

Supervalu (SVU) reported its fiscal 4Q16 and fiscal 2016 results on April 26, 2016. The company topped the analyst earnings estimates by $0.04 to report adjusted diluted earnings per share of $0.23.

Better-than-expected earnings were primarily driven by a decline in income tax expenses and lower interest costs. The savings on interest expenses came from lower debt balance. The company, however, missed revenue estimates for the third consecutive quarter, reporting total sales of $3.95 billion.

About Supervalu

Headquartered in Minnesota, Supervalu (SVU) is one of the largest grocery wholesalers and retailers in the US. The company manages its business through three segments:

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  • Independent Business: Through this segment, the company offers wholesale distribution and logistics service solutions to 1,871 independently owned retail stores.

  • Save-A-Lot: Revenue under this segment is derived from the sale of groceries at retail locations operated by the company and from stores licensed by the company to which it provides wholesale distribution. The company has decided to spin-off this segment into a separate entity. The separation process is likely to be completed in the first half of fiscal 2017.

  • Retail Food. This segment derives revenues from the sale of groceries and other products at 200 retail stores operated by the company.

With a market capitalization of ~$1.5 billion (as of April 26, 2016), Supervalu is included in the portfolio holdings of the iShares Morningstar Small-Cap Value ETF (JKL), which has ~0.32% in SVU.

About this series

This series is an earnings overview to SVU’s fiscal 4Q16 results. We’ll evaluate the company’s key drivers behind its financial performance in its latest quarter, look at its stock market performance, and compare its valuations with supermarket peers like Whole Foods Market (WFM), Sprouts Farmers Market (SFM), and Kroger (KR).

Let’s start by taking a closer look at what happened specifically with SVU’s sales.

Continue to Next Part

Browse this series on Market Realist: