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SuperValu: What Can We Expect for Its 1Q17 Results?

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SuperValu (SVU) is scheduled to report its fiscal 1Q17 results on Wednesday, July 27, 2016. Wall Street is predicting a year-over-year decline of 4.3% in the company’s EPS (earnings per share) to $0.22. The company reported better-than-expected EPS growth in 4Q16 despite missing sales growth expectations.

SVU topped Wall Street’s earnings estimates by $0.04 and reported adjusted diluted EPS of $0.23 in 4Q16. The better-than-expected results were due to lower income tax expenses and interest costs .

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About SuperValu

Headquartered in Minnesota, SuperValu is one of the largest grocery wholesalers and retailers in the United States. The company manages its business primarily through three business segments.

  • Independent Business – Through this segment, the company offers wholesale distribution and logistics service solutions to 1,871 independently-owned retail stores.
  • Save-A-Lot – Revenue under this segment is derived from the sale of groceries at retail locations operated by the company and from stores licensed by the company to which it provides wholesale distribution. The company has decided to spin off this segment into a separate entity. The separation process is likely to be completed in the first half of fiscal 2017.
  • Retail Food – This segment derives revenues from the sale of groceries and other products at 200 retail stores operated by the company.

With a market capitalization of $1.4 billion as of July 21, 2016, SuperValu is included in the portfolio holdings of the iShares Morningstar Small-Cap Value ETF (JKL), with a weight of ~0.28%.

Aim of this series

In this series, we’ll look at SVU’s financial performance in its last reported quarter, 4Q16, and discuss the company’s expected performance in the next quarter, 1Q17. We’ll also talk about the company’s stock market performance and compare its valuation with Whole Foods Market’s (WFM), Sprouts Farmers Market’s (SFM) and Kroger’s (KR) metrics. We’ll start with the past quarter’s results in the next part.

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