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MINNEAPOLIS A labor dispute at one of its banner stores, employee-related costs and an impairment charge attributed to a net loss of $1.47 billion for Supervalu in its second quarter, compared with earnings of $74 million last year, the company announced Tuesday.
Total net sales for the second quarter were $8.7 billion, the retailer said, compared with $9.5 billion. Second-quarter retail-food net sales were $6.7 billion, compared with $7.4 billion last year, a decrease of 9.7%, primarily reflecting the impact of same-store sales of -6.4% and previously announced market exits, Supervalu noted. Excluding Shaw’s, which was impacted by a labor dispute settled early in the quarter, same-store sales were -5.9%.
The intangible asset impairment charges totaled $1.516 billion after tax, or $7.16 per diluted share.
“Our sales performance continues to reflect a difficult operating environment. As the company moves into the next phase of its business transformation, we remain focused on our customers and taking actions that will better meet their needs. I remain confident that we have the correct strategy in place to achieve long-term success,” said Supervalu president and CEO Craig Herkert.
Supervalu adjusted its guidance from $1.61 to $1.81, as the retailer now expects a net loss in fiscal 2011 in the range of $5.94 to $5.74 per diluted share.
Commenting on guidance, Herkert stated, “It will take longer than originally anticipated to realize the benefit of the marketing, merchandising and operational initiatives that we continue to build upon. Accordingly, we are adjusting our guidance to better reflect this outlook.”