Supervalu 2Q Profit Falls 14%
Portland, Ore. Supervalu Inc. reported that its profit for its second quarter ended Sept. 6, fell 14% to $128 million.
While Supervalu said it has not seen traffic drop, sales rose less than 1% to $10.23 billion from $10.16 billion. The company reported a 1.3% drop in same-store sales.
Supervalu said it took a hit to profit by not passing on higher prices charged by food makers to cover ingredient costs. Supervalu spokeswoman Jean Giese told the Associated Press that the ailing economy and consumers’ desire for value led the company to try to keep prices lower and to offer more promotions in some markets. That promotional spending also cut into profits.
The company also took a hit with higher fuel, utility and other operating costs.
“We all know it is a difficult environment and one of the most challenging operating climates we have seen in a long time,” said Jeff Noddle, chairman and CEO of Supervalu. “We cannot blame external forces alone for our results. We did not execute well on several fronts.”
However, Noddle has already seen store sales improve and the company is taking several steps to cut costs.
He also noted that some of its brands, such as discount grocer Save-A-Lot is “one of the best positioned of any food retailer to serve economically distressed consumers” and was optimistic about sales there.
The 115,000-sq.-ft. store will serve as an anchor tenant for The Village at Fairview shopping center.
Van Tassel named president of Post Foods
ST. LOUIS Ralcorp Holdings has named Stephen Van Tassel corporate vp and president of the recently acquired Post Foods business.
Van Tassel joined the company on Aug. 4 in connection with the acquisition of Post Foods from Kraft Foods. He will be responsible for managing and growing Post Foods and will report to David Skarie, co-ceo and president of Ralcorp.
Van Tassel most recently served as vp of marketing for the North America Post Cereal Category.
Supervalu posts weaker-than-expected 2Q results
MINNEAPOLIS Supervalu reported second quarter net sales of $10.2 billion compared to $10.2 billion last year, net earnings of $128 million compared to $148 million last year, and diluted earnings per share of 60 cents compared to 69 cents last year. Second quarter fiscal 2009 and fiscal 2008 results included charges for one-time acquisition-related costs of $3 million and $19 million, pretax or 1 cent and 5 cent per diluted share, respectively.
The company reported year-to-date fiscal 2009 net sales of $23.6 billion compared to $23.5 billion last year, net earnings of $290 million compared to $296 million last year, and reported diluted earnings per share of $1.36 compared to $1.37 last year. Year to date fiscal 2009 results include charges for one-time acquisition-related costs of 4 cents per diluted share compared to 13 cents per diluted share last year.
Jeff Noddle, Supervalu chairman and ceo, said, “Despite weaker than expected operating results in the second quarter, we expect another record earnings per share year, with earnings in a range of $2.86 to $2.96 per share. As for the balance of the year, we have taken action to improve our sales performance while creating value for our customers and to reduce costs in the back half of the year.” Noddle went on to say, “We are also affirming that our cash flows will provide for more than $1 billion in capital spending and debt reductions of at least $400 million this year.”