SuperValu reports USD2.9 billion loss for 2008

US retailer SuperValu reported a net loss of USD2.9 billion for its fiscal year 2008. Net sales for the 53-week year totalled USD44.6 billion, compared to the USD44 billion reported last year. Jeff Noddle, SuperValu Chairman and CEO, said: “It’s good to wrap up fiscal 2009 with fourth quarter adjusted earnings per share on a comparable basis exceeding last year by 5%. As we enter fiscal 2010, we anticipate a challenging economic environment, but remain focused on executing the strategic initiatives that will drive sustainable long-term sales and earnings growth. Our centre-led merchandising and customer-centric marketing initiatives are on-track and our substantial remodel programme has freshened our store base. Combined with improved customer service scores and our revamped and energised own brands programme, we are better positioned to deliver an enhanced value message to consumers.” In fiscal 2009, the company completed 161 major remodels, 17 minor remodels, 14 new traditional stores and 25 new limited assortment corporate stores.

The retailer reported that for Q4 retail net sales totalled USD8.5 billion, including an approximate USD0.6 billion benefit from the 53-week year, compared to USD8.1 billion last year. When adjusted for the 53rd week, Q4 retail net sales were USD7.9 billion, primarily reflecting the impact of store closures and negative identical store sales of 2.0%. Supply chain services net sales were essentially flat at USD2.3 billion and included an approximate USD200 million benefit from the 53-week year. When adjusted for the 53rd week, supply chain services net sales were USD2.1 billion, primarily reflecting the ongoing transition of Target Corporation volume to self-distribution, offset in part by the pass through of inflation. Gross profit margin amounted to USD2.5 billion, or 22.9% of net sales, compared to USD2.4 billion, or 23.3% of net sales last year. The decrease in gross margin as a percent of net sales primarily reflects the impact of investments in price and promotional spending, inventory-related charges and LIFO charges, partially offset by favourable shrink. Q4 retail food operating loss totalled USD57 million.

SuperValu has increased its fiscal 2010 debt reduction guidance by USD100 million to approximately USD700 million. According to the retailer, the increase is a reflection of updated 2010 capital spending guidance of approximately USD750 million. The capital expenditure budget includes 75-80 major store remodels, 30-40 minor remodels, 3 new traditional supermarkets and 50-60 new limited assortment stores, including 35 licensed stores. Noddle stated: “Fiscal 2010 will be a year of further investment at SuperValu. We know that consumers are placing a greater emphasis on price and we are taking the actions necessary to strengthen our overall competitive position. While these actions will have a short-term impact on profitability, they build a better value proposition for consumers in this economic environment and provide a foundation for future robust sales growth.” The company also announced that net sales for next year are forecasted to be approximately USD43 billion while identical store sales growth, excluding fuel, is projected to be in the range of -1% to 1%

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