Upcoming AWS Coverage on Whole Foods Market
LONDON, UK / ACCESSWIRE / January 13, 2017 / Active Wall St. announces its post-earnings coverage on SUPERVALU Inc. (NYSE: SVU). The Company disclosed its third quarter fiscal 2017 results on January 11, 2017. The grocery store operator's top- and bottom-line numbers lagged behind market estimates. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of SUPERVALU's competitors within the Grocery Stores space, Whole Foods Market, Inc. (NASDAQ: WFM), is estimated to report earnings on February 08, 2017. AWS will be initiating a research report on Whole Foods Market following the release of the Company's earnings results.
Today, AWS is promoting its earnings coverage on SVU; touching on WFM. Get our free coverage by signing up to:
For the three months ended November 30, 2016, SUPERVALU reported net sales of $3.00 billion compared to $3.05 billion in the same period a year ago, representing a decrease of $42 million or 1.4%. Fees earned under transition services agreements (TSA) in Q3 FY17 were $37 million compared to $46 million on Q3 FY16.
For Q3 FY17, SUPERVALU recorded gross profit of $407 million, or 13.6% of net sales, compared to gross profit of $436 million, or 14.3% of net sales, in Q3 FY16. The Company stated that the gross profit rate decrease compared to last year was primarily due to lower TSA fees and higher employee costs. Pro-forma adjusted EBITDA from continuing operations for the reported quarter was $114 million compared to $132 million in the year earlier comparable quarter.
For Q3 FY17, SUPERVALU reported a net loss from continuing operations of $11 million, or $0.04 per diluted share, which included $25 million of after-tax non-cash charges comprised of a pension settlement charge, a goodwill impairment charge, and store closure charges and costs, which was partially offset by a deferred income tax benefit. When adjusted for these items, the ompany's Q3 FY17 net earnings from continuing operations were $14 million, or $0.05 per diluted share. SUPERVALU's net earnings from continuing operations for Q3 FY16 were $16 million, or $0.05 per diluted share, which included $6 million in after-tax costs related to asset impairment charges, employee severance, and store closure charges and costs. When adjusted for these items, the year earlier quarter net earnings from continuing operations were $22 million, or $0.08 per diluted share. The Company's adjusted earnings result fell short of Wall Street's expectations of $0.13 per share on revenue of $3.79 billion.
Wholesale: During Q3 FY17, SUPERVALU's Wholesale net sales totaled $1.91 billion compared to $1.90 billion last year, an increase of 0.2%. Wholesale net sales benefitted from sales to new customers and increased sales to new stores operated by existing customers, which was partially offset by stores from the prior year no longer supplied by the Company. Wholesale operating earnings in the reported quarter were $52 million, or 2.7% of net sales, compared to Wholesale operating earnings in the year earlier quarter of $54 million, or 2.8% of net sales.
Retail: During the reported quarter, SUPERVALU's Retail segment generated net sales of $1.06 billion compared to $1.10 billion in Q3 FY16, a decrease of 3.4%, the decline in net sales was attributed to identical store sales of negative 5.7% and closed stores, which was partially offset by sales from acquired and new stores. The Company's retail operating loss in Q3 FY17 was $14 million, or negative 1.3% of net sales, compared to Q3 FY16 retail operating earnings of $21 million, or 2.0% of net sales.
Corporate: Q3 FY17, fees earned under the TSAs were $37 million compared to $46 million in Q3 FY16. Corporate segment's operating loss in Q3 FY17 was $37 million and included a $41 million pension settlement charge. When adjusted for this item, net corporate operating earnings were $4 million. The Company's net corporate operating loss for Q3 FY16 was $9 million and included $2 million of employee severance costs. When adjusted for this item, Q3 FY16's net corporate operating loss was $7 million.
SUPERVALU's year-to-date net cash flows provided by operating activities of continuing operations were $147 million for FY17 compared to $154 million for last year. At the end of Q3 FY17, the Company's outstanding debt, including capital lease obligations, totaled $2.55 billion, a net increase of approximately $160 million in the reported quarter. SUPERVALU ended Q3 FY17 with approximately $260 million of ABL borrowing, leaving $675 million of available capacity under this facility.
Two days after the quarter ended, SUPERVALU closed on the sale of Save-A-Lot, which generated approximately $1.3 billion of cash proceeds, after customary closing adjustments. In addition to transaction fees and expenses, the Company utilized the proceeds towards paying down its term loan by $750 million as required, and paid off the $260 million ABL balance. SUPERVALU stated that it then made a second payment against its term loan for approximately $82 million, as was required within 10 days of closing on the sale of Save-A-Lot, which brought the Company's net secured leverage ratio down to the required 1.5 times. As a result of the Save-A-Lot sale, SUPERVALU has reduced outstanding debt by approximately $1.1 billion. The remaining proceeds of approximately $180 million are being held as cash on the balance sheet.
At the close of trading session on January 12, 2017, SUPERVALU's stock price fell 4.51% to end the day at $4.23. A total volume of 11.26 million shares were exchanged during the session, which was above the 3-month average volume of 3.67 million shares. The stock currently has a market cap of $1.14 billion. Shares of the company have a PE ratio of 7.26.
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