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Actionable news in SVU: SUPERVALU Inc,

--Supervalu Inc. (Nyse: Svu) Today Reported

The following excerpt is from the company's SEC filing.

second

quarter fiscal

net sales of

$4.06 billion

and net earnings from continuing operations of

$31 million

, or $0.11 per diluted share, which included $6 million in after-tax costs related to the potential separation of Save-A-Lot and severance costs. When adjusted for these items,

quarter fiscal 2016 net earnings from continuing operations were $37 million, or

per diluted share.

Net earnings from continuing operations for last year’s

quarter were

$1 million

in after-tax information technology intrusion costs. When adjusted for this item,

$32 million

per diluted share. [See tables 1-5 for a reconciliation of GAAP and non-GAAP (adjusted) results appearing in this release.]

"I'm pleased that we increased adjusted EBITDA in the second quarter compared to last year in spite of several operating headwinds," said President and CEO Sam Duncan. "Our focus remains on driving sales across all three segments and finishing the year strong."

Second

Quarter Results - Continuing Operations

quarter net sales were

$4.04 billion

last year, an

$21 million

0.5 percent

. Save-A-Lot network identical store sales were negative

1.6 percent

. Identical store sales for corporate stores within the Save-A-Lot network were positive

0.9 percent

. Retail Food segment identical store sales were negative

3.3 percent

. Total net sales within the Independent Business segment decreased

0.2 percent

. Fees earned under transition services agreements (“TSAs”) in the

$48 million

$44 million

last year.

Gross profit for the

quarter was

$583 million

14.4 percent

of net sales. Last year’s

quarter gross profit was

$574 million

14.2 percent

of net sales. The

in gross profit rate compared to last year was primarily driven by higher base margins across all three segments, lower logistics costs, and higher TSA fees partially offset by higher levels of shrink.

Selling and administrative expenses in the

$489 million

and included $4 million of costs related to the potential separation of Save-A-Lot and $4 million of severance costs. When adjusted for these items, selling and administrative costs were $481 million, or 11.9 percent of net sales. Selling and administrative expenses in last year’s

$480 million

and included $1 million in pre-tax information technology intrusion costs. When adjusted for this item, last year's selling and administrative expenses were $479 million, or 11.9 percent of net sales.

Net interest expense for the

$46 million

in last year's second quarter.

SUPERVALU’s income tax expense was

$19 million

40.0 percent

of pre-tax earnings, for the

quarter, compared to

$18 million

36.9 percent

of pre-tax earnings in last year’s

quarter. The change in the effective tax rate is primarily due to an unfavorable mix of income in state taxing jurisdictions.

quarter Independent Business net sales were

$1.83 billion

$1.84 billion

last year, a

. The decrease is primarily due to lower sales to existing customers and lost stores, partially offset by sales from new stores with existing customers and new customers.

Independent Business operating earnings in the

$49 million

2.7 percent

of net sales. Last year’s Independent Business operating earnings in the

$54 million

2.9 percent

of net sales. The decrease in Independent Business operating earnings was driven by higher employee costs related to new business activity.

quarter Save-A-Lot net sales were

$1.09 billion

$1.06 billion

3.2 percent

. The sales increase reflects the impact of new store openings. Identical store sales within the Save-A-Lot network were negative

Save-A-Lot operating earnings in the

3.0 percent

of net sales. Last year’s Save-A-Lot operating earnings in the

$26 million

2.5 percent

of net sales. The increase in Save-A-Lot operating earnings as a percent of sales was primarily driven by higher base margins and lower logistics costs.

quarter Retail Food net sales were

$1.11 billion

last year, a decrease of

1.2 percent

. The sales decrease reflects negative identical store sales of 3.3 percent and closed stores.

Retail Food operating earnings in the

$10 million

of net sales. Last year’s Retail Food operating earnings were

$20 million

1.8 percent

of net sales. The decrease in Retail Food operating earnings was driven by higher shrink expense and employee related costs.

Corporate

quarter fees earned under the TSAs were

last year. The increase was primarily driven by fees earned under the Company's transition service agreement with Haggen.

Net Corporate operating earnings in the

$3 million

and included $4 million of costs related to the potential separation of Save-A-Lot and $4 million of severance costs. When adjusted for these items, net Corporate operating earnings were $11 million. Last year’s

quarter net Corporate operating loss was

and included $1 million in information technology intrusion costs, net of insurance receivable. When adjusted for this item, last year's net Corporate operating loss was $5 million. The improvement in net Corporate operating earnings was primarily driven by lower employee related costs and higher fees earned under the TSAs.

Cash Flows - Continuing Operations

Year-to-date fiscal

net cash flows provided by operating activities of continuing operations were

$276 million

$158 million

in the prior year, reflecting lower levels of investment in working capital. Year-to-date net cash flows used in investing activities of continuing operations were

$119 million

$121 million

in the prior year. Year-to-date net cash flows used in financing activities of continuing operations were

$25 million

$34 million

Conference Call

A conference call to review the

quarter results is scheduled for 9:00 a.m. central time today. The call will be webcast live at

www.supervaluinvestors.com

(click on microphone icon). A replay of the call will be archived at

. To access the website replay go to the...


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