News Column

Supervalu stock gains as 1Q beats estimates

July 24, 2014

By Tom Webb, Pioneer Press, St. Paul, Minn.



July 24--Supervalu's turnaround continues to gain traction, with the Eden Prairie-based grocer reporting more positives than negatives in its first-quarter earnings Thursday.

Net income was $43 million, or 17 cents a share, topping analysts' forecasts. At mid-morning, shares hit a two-year high of $8.99 before easing a bit. And same-store sales were positive in its Save-A-Lot stores as well as its supermarkets, including Cub Foods in the Twin Cities.

Profit decreased by 49 percent from the previous fiscal first quarter because of a series of one-time gains and tax benefits that year. Last year, the company earned $85 million, or 34 cents per share.

Wall Street took these one-time factors into account. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 17 cents per share, which Supervalu beat.

"Fiscal 2015 is off to a solid start across our business segments," CEO Sam Duncan said in a statement. "Our first quarter results reflect the investments we are making this year to position the company for future success and I am pleased with our operating performance."

Not all the numbers were positive. Net sales fell 0.1 percent from the previous year, to $5.23 billion. And its distribution business to other grocers reported a sales decline of 2.6 percent.

But same-store sales were mostly higher. Save-A-Lot stores reported a same-store sales gain of 5.6 percent, including a 7.2 percent lift in the corporate-owned stores. The company's traditional supermarkets reported a same-store sales gain of 0.6 percent.

In late morning trading, shares were up nearly 1 percent, or 7 cents a share, to $8.95.

Associated Press reports were used in this story. Tom Webb can be reached at 651-228-5428. Follow him at twitter.com/TomWebbMN.

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(c)2014 Pioneer Press (St. Paul, Minn.)

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Source: Saint Paul Pioneer Press (MN)


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