Supervalu reports soft first quarter but beats expectations
Ann Merrill
Star Tribune
Wednesday, June 27, 2001
Supervalu Inc. reported a decline in first-quarter sales and net income on Tuesday, but managed to beat Wall Street's earnings estimates.
The Eden Prairie-based food wholesaler and retailer has been on a bumpy road in recent months: parting ways with Kmart, a major distribution client, and unveiling a
restructuring plan that includes the closing of warehouses and grocery stores.
The company, with net income of $59.4 million for the quarter compared to $70 million a year earlier, reported earnings of 45 cents per share compared with 53 cents
in first-quarter 2000. Analysts polled by Thomson Financial/First Call had estimated earnings at 43 cents per share.
Jeff Noddle, who formally takes on the role of chief executive at the company's annual meeting today, told analysts on a conference call Tuesday afternoon that the
company's performance is improving.
On the retail side, the company's comparable-store sales were down 1.5 percent. "We're not happy with any negative number, but that's strong progress compared to a
decline of 5 percent in the fourth quarter," he said.
Noddle said renovation and emphasis on low prices at Cub stores in the Chicago market have led to improved sales.
The company's Save-A-Lot limited-assortment concept saw sales climb after a bump in advertising, including its first national TV advertising.
On the distribution side, Supervalu will end its relationship with Kmart Friday. The loss is expected to have an impact of 18 cents to 22 cents per share on earnings.
-- Ann Merrill is at amerrill@startribune.com . |
