MINNEAPOLIS (AP) – SuperValu Inc. returned to a profit in its fiscal second quarter, absent hefty goodwill and impairment charges incurred a year earlier.
The supermarket operator’s results beat Wall Street estimates, but it cut the high end of its fiscal 2012 earnings outlook on Wednesday.
Its stock rose 5 cents to $8.22 in premarket trading.
Supervalu launched a turnaround plan well over a year ago that has started to pay off. The company brought in new management, cut costs, lowered debt, closed stores and shifted to a heavier emphasis on tailoring its stores to local needs. It also has been expanding its low-price Save-A-Lot chain to meet the demands of cost-conscious shoppers. The company also announced in September that it would sell most of its gas stations as a way to free up cash.
SuperValu, which runs SuperValu, Jewel-Osco, Albertsons and other supermarket chains, reported net income of $60 million, or 28 cents per share, for the period ended Sept. 10. That compares with a loss of $1.47 billion, or $6.94 per share, a year ago.
The prior-year period included goodwill and impairment charges of $7.16 per share as well as certain other costs totalling 6 cents per share. Removing those items, earnings were 28 cents per share.
The latest results beat the 20 cents per share that analysts surveyed by FactSet expected.
Revenue dropped 3 percent to $8.43 billion from $8.66 billion, but still beat Wall Street’s estimate of $8.36 billion.
Retail food sales slipped to $6.6 billion from $6.7 billion mostly because SuperValu exited certain markets and its revenue at stores open at least a year fell 1.8 percent. This metric is a key gauge of a retailer’s health because it excludes results from stores recently opened or closed.
Independent business sales declined to $1.8 billion rom $2 billion primarily due to Target Corp.’s shift to self-distribution and the sale of Total Logistic Control.
For fiscal 2012, SuperValu now expects earnings between $1.20 and $1.30 per share. Its prior guidance called for earnings in a range of $1.20 to $1.40 per share. The company’s outlook assumes revenue of about $36.5 billion, down from a prior forecast of $37 billion.
Analysts expect earnings of $1.21 per share on revenue of $36.51 billion.
SuperValu expects full-year revenue at stores open at least a year to be down 2 percent to 2.5 percent, excluding fuel.
SuperValu has a network of about 4,300 stores and approximately 135,000 employees.
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