Supervalu Inc. lowered its sales and profit guidance for fiscal 2012 after reporting another drop in sales and a net loss prompted by a big noncash impairment charge.


Supervalu Inc., sales and profit guidance, fiscal 2012, Target Corp., Save-A-Lot
























































































































































































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Projections scaled back by Supervalu

January 23rd, 2012

MINNEAPOLIS – Supervalu Inc. lowered its sales and profit guidance for fiscal 2012 after reporting another drop in sales and a net loss prompted by a big noncash impairment charge.

Although executives maintained that their turnaround plan remains on course, investors drove the company’s stock price down more than 12% on the day results were released.

Identical-store sales fell 2.9%, and management revised its full-year forecast to a decline of 2.5% to 3% from its previous expectation of a 2% to 2.5% decrease.

Total sales dipped 4% to $8.33 billion. In addition to the identical-store decrease, the top-line performance reflects a year-over-year reduction of 1.5% in retail square footage due to Supervalu’s market exits in fiscal 2011, as well as lower sales from its wholesale grocery business stemming from Target Corp.’s switch to self-distribution.

While management now expects to report a full-year loss of $2.58 to $2.48 per diluted share as a result of the third quarter impairment change, its guidance on adjusted earnings (excluding the impairment charges) remains unchanged at $1.20 to $1.30 per share. Full-year net sales are calculated at $36.1 billion.

Capital expenditures for the year are still planned to total between $700 million and $725 million, about 75% of which will be allocated to Supervalu’s traditional retail business. While the company remains upbeat about the potential of its Save-A-Lot hard-discount format, management scaled down the planned number of openings for fiscal 2012 for the third time in a year, blaming an economic climate that discourages franchisees.

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