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Supervalu Q4 Comps Fall, Earnings Up

Supervalu here said comparable-store sales fell 6.8% in the fourth quarter, but the company also switched from a loss in the year-ago period to a profit in the most recent fourth quarter.

MINNEAPOLISSupervalu here said comparable-store sales fell 6.8% in the fourth quarter, but the company also switched from a loss in the year-ago period to a profit in the most recent fourth quarter.

Net income of $97 million — after one-time charges of $34 million — compared with a loss of $201 million in the year-ago fourth quarter, which included $498 million in pretax goodwill and impairment charges. Sales for the most recent quarter, which ended Feb. 27, were down about 15%, to $7.2 billion, reflecting the comp-sales decline, store closures and an additional week in the year-ago period.

In a conference call with analysts, Craig Herkert, chief executive officer, said he has recently completed the assembly of his top management team and expected that to drive better results in the future. In addition, the company has rolled out a new paradigm for store managers to encourage local customer responsiveness, and is seeing success from its “Simplify Her Experience” (SHE) initiative, which involves rationalizing SKUs and improving signage and adjacencies. The moves are also helping the company promote its private-label products, he said.

For the full year, net income of $393 million compared with a loss of $2.9 billion in fiscal 2009. Sales totaled $40.6 billion, down about 9% from year-ago levels. Comparable-store sales fell 5.1%.

For the current fiscal year, the company projected sales of $39 billion, including a comp-sales decline of 2% and a drop in 3% from distribution, primarily due to the loss of Target Corp. volume and the loss of Ukrop’s Super Markets following that chain’s acquisition by Giant-Carlisle.

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