Supervalu said Wednesday a challenging environment led to decreased net sales in the third quarter, including lower-than-expected identical-store sales at its Save-A-Lot division.
Adjusted earnings per share of 16 cents on net sales of $4.1 billion were in line with analyst estimates, although Save-A-Lot's 3.4% identical-store sales decline was higher than anticipated. Identical sales in Supervalu's retail stores division declined by 2.6% and distribution sales decreased by 3.5% in the quarter, which ended Dec. 5.
"Although third quarter adjusted EBITDA was in-line with our operating plan, we continue to operate in a challenging environment," Sam Duncan, Supervalu's president and CEO, said in a statement. "Improving sales is a primary focus as we look to complete the fiscal year."
The discount Save-A-Lot chain, which Supervalu, headquartered in Eden Prairie, Minn., is planning to spin off into a separate company, recorded total sales of $1.1 billion for the quarter, down by 1.5% from the same period last year, reflecting lower same-store sales and the effect of closed stores. ID sales at corporate stores experienced a 0.4% ID slide.
Save-A-Lot operating earnings in the third quarter were $32 million, or 2.9% of sales, and included $2 million of store closure impairment charges. When adjusted for this item, Save-A-Lot's operating earnings were $34 million, or 3.1 percent of sales, flat with last year's figures.
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