Supervalu on Target for Synergy Goals: Noddle

ELLIOT ZWIEBACH

MINNEAPOLIS — Supervalu here said yesterday it is on track to deliver the full measure of post-acquisition synergies in 18 months, despite disappointing identical-store sales during its fiscal second quarter, which ended Sept. 8. IDs for the quarter increased 0.5% — below the company’s guidance of 1% to 2% — “[but] we remain on track [to achieve synergies of $150 million to $175 million] with virtually every key metric,” Jeff Noddle, chairman, president and chief executive officer, told analysts. He said the company’s current run rate on ID sales is slightly improved, “and as such, our ID sales range for the year remains at 1% to 2%, with the expectation we will be at the low end of the range.” He noted that ID sales improvement is “one of our top priorities” and announced that the company’s ID sales goal for fiscal 2010 (which begins in March 2009) is 3% — a goal he said he expects Supervalu to achieve by continuing to invest in remodels, implementing merchandising and marketing programs, and executing at store level. Net income for the quarter rose 12.1% to a record $148 million, while sales fell 4.8% to $10.2 billion — due to one less week of acquired operations, for a total of about $450 million, and the closure of 79 acquired stores that were underperforming. For the half, net income rose 35.2% to $296 million and sales rose 42.6% to $23.4 billion.

Read More of Today's Headlines