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What’s Expected from SUPERVALU’s Fiscal 1Q18 Results?

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What’s Expected from SUPERVALU’s Fiscal 1Q18 Results? PART 1 OF 5

Discussing SUPERVALU ahead of Its Fiscal 1Q18 Results

Series snapshot

Minneapolis-based SUPERVALU (SVU) is scheduled to report its fiscal 1Q18 earnings results on July 25, 2017.

Wall Street expects the company to report earnings per share (or EPS) of $0.10 in the quarter, compared to $0.19 in fiscal 1Q17. However, its fiscal 1Q18 earnings won’t be directly comparable to last year’s results. SUPERVALU’s fiscal 1Q17 numbers included its Save-A-Lot business, which the company sold in fiscal 3Q17.

Discussing SUPERVALU ahead of Its Fiscal 1Q18 Results

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SUPERVALU’s fiscal 1Q18 top line is expected to contract 25% YoY (year-over-year) to $3.9 billion.

About SUPERVALU

SUPERVALU primarily operates through two businesses: wholesale distribution and logistics services and retail grocery stores such as Farm Fresh and Cub Foods. The company clocked total sales of $12.5 billion in fiscal 2017.

In October 2016, SVU sold Save-A-lot, its grocery chain, to Onex for $1.4 billion.

Valuation summary

SUPERVALU is currently trading at a one-year forward price-to-earnings (or PE) ratio of 9x, compared to its three-year average of 10.4x.

SVU continues to be cheaper than most of its supermarket and wholesaling peers. Kroger (KR), Whole Foods Market (WFM), and Sprouts Farmers Market (SFM) are trading at PEs of 11.2x, 31.8x, and 25.4x, respectively. Wholesalers United Natural Foods (UNFI) and Sysco (SYY) are trading at PEs of 13.6x and 18.8x, respectively.

ETF investors seeking to add exposure to SVU can consider the SPDR S&P Retail ETF (XRT), which invests 0.9% of its portfolio in the company.

What’s this series all about?

In this series, we’ll look at SUPERVALU’s financial performance and discuss the key drivers of its fiscal 1Q18. We’ll also talk about the company’s stock market performance, analysts’ recommendations, and its valuations compared to those of its peers.

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