SUPERVALU (SVU) Misses Q3 EPS by 8c

SUPERVALU (NYSE: SVU) reported Q3 EPS of $0.05, $0.08 worse than the analyst estimate of $0.13. Revenue for the quarter came in at $3 billion versus the consensus estimate of $3.79 billion.

“The successful sale of Save-A-Lot early in the fourth quarter provides SUPERVALU with additional flexibility to operate and grow our business,” said President and CEO Mark Gross. “Additionally, our Wholesale team has done a tremendous job delivering for our customers. It is a significant accomplishment that we increased Wholesale sales compared to last year given the sales lost at the end of fiscal 2016. Unfortunately, in our Retail segment we have not been able to overcome persistent deflation, competitive impacts, and other factors. It takes time to change customers’ shopping habits, but our team is dedicated to improving our results."

Chief Operating Officer and CFO Bruce Besanko added, “Early in the fourth quarter we used the majority of the proceeds from the sale of Save-A-Lot to reduce our outstanding debt by approximately $1.1 billion. We have also taken steps to reduce our pension plan obligations through a successful lump-sum buyout of certain plan participants that resulted in the pension settlement charge this quarter. In addition, we made a $25 million cash contribution to the pension plan." Besanko ended by saying, “Given the many moving parts from the sale of Save-A-Lot, we are managing the business for the next several quarters by reference to pro forma adjusted EBITDA. For the third quarter, pro forma adjusted EBITDA was $114 million, $18 million less than last year’s third quarter, reflecting the challenging operating environment across the grocery industry.”

For earnings history and earnings-related data on SUPERVALU (SVU) click here.

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