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Supervalu Stock Plummeted on 1Q17 Revenue and Earnings Miss

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Snapshot of the series

Supervalu (SVU) reported its fiscal 1Q17 results on Wednesday, July 27, 2016. The company missed Wall Street’s estimates for both earnings and revenues. Earnings came in at $0.19 per share, missing analysts’ average estimate by $0.03.

SVU’s total revenue declined 3.9% YoY (year-over-year) in 1Q17 to $5.2 billion since the company’s wholesale and retail segments reported dismal performances. The company missed analysts’ average revenue estimates by $100 million, making it the fourth consecutive quarter of revenue misses.

Supervalu stock closed at $4.62 on July 27, 2016, ~12.5% lower than the previous day’s closing price.

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About Supervalu

Headquartered in Minnesota, Supervalu (SVU) is one of the largest grocery wholesalers and retailers in the United States. The company manages its business through the following three business segments:

  • Independent Business segment: Through this segment, the company offers wholesale distribution and logistics service solutions to 1,871 independently-owned retail stores.
  • Save-A-Lot segment: 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 segment: 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 $1.2 billion as of July 27, 2016, Supervalu is included in the portfolio holdings of the iShares Morningstar Small-Cap Value ETF (JKL) with a weight of ~0.24%.

What’s this series all about?

This series is an earnings overview of Supervalu’s fiscal 1Q17 results. We’ll evaluate the key drivers behind the company’s financial performance in 1Q17 and briefly look at its stock performance. We’ll also compare its valuations with supermarket peers such as Whole Foods Market (WFM), Sprouts Farmers Market (SFM), and Kroger (KR).

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