Supervalu Stock Soars As Earnings Trump Estimates

Supervalu Stock Soars As Earnings Trump Estimates

Although the company reported a net loss from continuing operations of $105 million, its adjusted earnings reached $0.14 per share, nearly doubling analysts’ expectations.

Shares of Supervalu, Inc., rose 18.5 percent to $8.02 Thursday afternoon after the company reported that its adjusted first-quarter earnings nearly doubled analysts’ expectations.
 
The Eden Prairie-based retailer announced that net earnings for the first quarter, which ended June 15, totaled $85 million, or $0.34 per share, up 107 percent from $41 million, or $0.19 per share, during the same period in 2012. Excluding certain costs like severance and asset impairments, adjusted earnings were $0.14 per share, $0.08 higher than what analysts polled by Thomson Reuters had expected.
 
However, the company reported a net loss of $105 million from continuing operations, compared with a loss of $18 million from the same period in 2012. That $105 million loss included $139 million in charges related to the company’s $3.3 billion sale of several grocery brands.
 
First-quarter revenue, meanwhile, totaled $5.16 billion, down 1.5 percent from $5.24 billion in the first quarter of 2012. Revenue fell just short of analysts’ projections of $5.17 billion.
 
Meanwhile, Supervalu also said that it appointed the final two members to its reconstituted board of directors: Eric Johnson, president and CEO of Baldwin Richardson Foods Company, and Sam Duncan, Supervalu’s president and CEO.
 
Those appointments mark the end of Supervalu’s management changes that were announced less than two weeks after the company completed the sale of five of its largest retail grocery brands to AB Acquisition, LLC, an investor group led by New York-based private investment firm Cerberus Capital Management L.P., in a deal worth $3.3 billion. The group bought 877 stores under the Albertsons, Acme, Jewel-Osco, Shaw’s, and Star Market banners, as well as the associated Osco and Sav-on in-store pharmacies.
 
Supervalu in January announced that it had struck the deal to sell the five grocery brands. The company said at the time that, following the close of the transaction, Duncan would replace Wayne Sales, who became Supervalu’s president and CEO last year. The company appointed Duncan to his new post in early February, saying that the timing would enable him to “immediately start refining and, where appropriate, implement his plans for the business.”
 
Supervalu also appointed two new members to its board of directors in April: John Standley, chairman, president, and CEO of Rite Aid Corporation, and Mark A. Neporent, chief operating officer and general counsel of Cerberus Capital Management, L.P.