Supervalu on Tuesday reported fourth quarter and full year fiscal 2017 results, achieving gains in its Wholesale segment but taking a hit on same-store sales in its Retail organization.
“We finished fiscal 2017 with momentum in our Wholesale business and an improved balance sheet resulting from the sale of Save-A-Lot,” said President and CEO Mark Gross. “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.”
Fourth quarter net sales were $2.91 billion compared to $2.89 billion last year, an increase of $16 million or 0.6 percent. Total net sales within the Wholesale segment increased 3.0 percent. Retail identical store sales were down 5.8 percent.
Gross profit for the fourth quarter was $435 million, or 15.0 percent of net sales. Last year’s fourth quarter gross profit was $431 million, or 14.9 percent of net sales. The gross profit rate increase compared to last year is primarily driven by higher gross margins and vendor allowances as well as lower inventory shrink costs, according to Minneapolis-based Supervalu.
Fourth quarter Wholesale net sales were $1.79 billion, compared to $1.74 billion last year, an increase of 3.0 percent. Supervalu says the net sales increase is primarily due to sales to new customers and increased sales from new stores operated by existing customers, partially offset by stores from the prior year no longer being supplied by the company.
Wholesale operating earnings in the fourth quarter were $64 million, or 3.6 percent of net sales. Last year’s Wholesale operating earnings in the fourth quarter were $50 million, or 2.9 percent of net sales. The increase in Wholesale operating earnings was driven by higher gross margins and vendor allowances, Supervalu says.
Fourth quarter Retail net sales were $1.07 billion, compared to $1.11 billion last year, a decrease of 3.2 percent. The net sales decrease reflects negative identical store sales of 5.8 percent, 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 percent of net sales. Last year’s Retail operating earnings in the fourth quarter were $30 million, or 2.7 percent 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, the company says.
More details can be found here.