Supervalu CEO: Save-A-Lot sale, Unified Grocers acquisition will lead to growth

MINNEAPOLIS — The completed sale of Save-A-Lot and the announced acquisition of Unified Grocers should improve Supervalu’s balance sheet and lead to greater growth in the future, President and CEO Mark Gross said Tuesday during the company’s 2017 fiscal fourth-quarter earnings report.

"We finished fiscal 2017 with momentum in our Wholesale business and an improved balance sheet resulting from the sale of Save-A-Lot,” he said. “I’m very excited about our agreement to acquire Unified Grocers as it brings together two great companies to create one of the nation’s leading grocery wholesale organizations. At the same time, we are working to fundamentally improve the shopping experience in our retail stores and with new leadership and renewed passion we are focused on changing our operating results. I remain optimistic for growth and believe strongly in the path our team is pursuing to achieve it.”

Supervalu reported fourth quarter fiscal 2017 consolidated net sales of $2.91 billion and net earnings from continuing operations of $6 million, which included $32 million in after-tax charges and costs related to an asset impairment charge, unamortized financing cost charges and a pension settlement charge for the period ended Feb. 25. When adjusted for these items, fourth-quarter fiscal 2017 net earnings from continuing operations were $38 million, or $0.13 per diluted share.

Net earnings from continuing operations for last year’s fourth quarter were $30 million, which included $9 million in after-tax charges and costs related to debt refinancing charges and store closure charges and costs. When adjusted for these items, fourth quarter fiscal 2016 net earnings from continuing operations were $39 million, or $0.14 per diluted share.

Fourth quarter retail net sales were $1.07 billion, compared to $1.11 billion last year, a decrease of 3.2%. The net sales decrease reflects negative identical store sales of 5.8% partially offset by sales from acquired and new stores.

Retail operating loss in the fourth quarter was $27 million and included a $41 million asset impairment charge. When adjusted for this item, retail operating earnings were $14 million, or 1.3% of net sales. Last year’s retail operating earnings in the fourth quarter were $30 million, or 2.7% of net sales. The decrease in retail operating earnings, as adjusted, was driven by the impact of lower sales and higher employee costs partially due to acquired and new stores.