Supervalu ends Q2 with sales bump, and acquisition
Supervalu is kicking off the second half of its fiscal year with an acquisition.
The company is acquiring Associated Grocers, a transaction valued at approximately $180 million. The deal will give Supervalu the ability to expand its operations into a new part of Florida, and bring the company’s products and services to Associated Grocers' diverse customer base in South Florida, the Caribbean, and other international markets.
Also part of the pending transaction, Supervalu has reached a long-term supply agreement with Associated Grocers' largest customer that will go into effect upon the closing of the transaction, the company reported.
During Associated Grocers' last fiscal year, which ended on July 29, the company’s revenues were approximately $650 million. This is an estimate by Supervalu under its accounting policies.
The news comes as Supervalu reported a sales increase for its second quarter. For the ended September 9, the company reported net sales of $3.80 billion, a 35% increase compared to $2.81 billion last year. This surpassed FactSet estimates of $3.79 billion.
The company reported a net loss from continuing operations of $25 million, which included a $27 million after-tax asset impairment charge and $16 million of after-tax merger and integration costs. When adjusted for these items, second quarter fiscal 2018 net earnings from continuing operations were $18 million, or $0.46 per diluted share. This also beat the FactSet consensus of $0.36.
Second quarter wholesale net sales were $2.74 billion, compared to $1.73 billion last year, an increase of 58%. Retail net sales were $1.02 billion, a 1.1% increase compared to $1.03 billion last year. The net sales decrease reflects identical store sales of negative 3.5% and closed stores, partially offset by sales from acquired and new stores.
“We continue to make tremendous strides in driving our strategy, evidenced by another quarter of strong growth from our core wholesale business which now represents over 70% of net sales,” said Supervalu president and CEO Mark Gross. “Additionally, our results now include the benefit of Unified Grocers, where I'm pleased that the transition is going well. We have a lot to be excited about as we turn our focus toward the back half of our fiscal year.”
Looking ahead, Supervalu expects fiscal 2018 net earnings from continuing operations to be in the range of $31 million to $50 million. Adjusted EBITDA, including the contribution from Unified Grocers, is expected to be in the range of $475 million to $495 million, according to the company.
The company is acquiring Associated Grocers, a transaction valued at approximately $180 million. The deal will give Supervalu the ability to expand its operations into a new part of Florida, and bring the company’s products and services to Associated Grocers' diverse customer base in South Florida, the Caribbean, and other international markets.
Also part of the pending transaction, Supervalu has reached a long-term supply agreement with Associated Grocers' largest customer that will go into effect upon the closing of the transaction, the company reported.
During Associated Grocers' last fiscal year, which ended on July 29, the company’s revenues were approximately $650 million. This is an estimate by Supervalu under its accounting policies.
The news comes as Supervalu reported a sales increase for its second quarter. For the ended September 9, the company reported net sales of $3.80 billion, a 35% increase compared to $2.81 billion last year. This surpassed FactSet estimates of $3.79 billion.
The company reported a net loss from continuing operations of $25 million, which included a $27 million after-tax asset impairment charge and $16 million of after-tax merger and integration costs. When adjusted for these items, second quarter fiscal 2018 net earnings from continuing operations were $18 million, or $0.46 per diluted share. This also beat the FactSet consensus of $0.36.
Second quarter wholesale net sales were $2.74 billion, compared to $1.73 billion last year, an increase of 58%. Retail net sales were $1.02 billion, a 1.1% increase compared to $1.03 billion last year. The net sales decrease reflects identical store sales of negative 3.5% and closed stores, partially offset by sales from acquired and new stores.
“We continue to make tremendous strides in driving our strategy, evidenced by another quarter of strong growth from our core wholesale business which now represents over 70% of net sales,” said Supervalu president and CEO Mark Gross. “Additionally, our results now include the benefit of Unified Grocers, where I'm pleased that the transition is going well. We have a lot to be excited about as we turn our focus toward the back half of our fiscal year.”
Looking ahead, Supervalu expects fiscal 2018 net earnings from continuing operations to be in the range of $31 million to $50 million. Adjusted EBITDA, including the contribution from Unified Grocers, is expected to be in the range of $475 million to $495 million, according to the company.