MINNEAPOLIS — Supervalu on Thursday reported first quarter fiscal 2014 net sales of $5.2 billion, down 1.5%, and net earnings of $85 million, or $0.34 per diluted share. The decrease in net sales primarily reflects a decline in identical store sales of negative 3% percent for retail food and negative 1.9% for Save-A-Lot. Identical store sales for corporately operated stores within the Save-A-Lot network were negative 1.2%.
“Our first quarter was highlighted by a renewed focus on driving sales and cash in all segments of our business and I’m pleased with the progress we made, especially the sequential improvement in sales trends from the fourth quarter of fiscal 2013 in each of our business segments,” stated Sam Duncan, Supervalu president and CEO. “We have a good foundation, strong leadership team, improved debt maturity profile and achievable goals across each operating segment.”
Specifically across its retail food operations, which includes pharmacy, Supervalu posted net sales of $1.4 billion, down 2.9%, primarily reflecting that same-store sales decline of 3%.
But there is still a lot of work to do, Duncan acknowledged, as Supervalu focuses on turning identical sales positive. To that end, Supervalu has started revamping its center store, eliminating aisle stands for less clutter and improving product adjacencies. "Our focus remains on generating positive ID sales," Duncan told analysts Thursday morning. "We will make the necessary investment to accomplish this goal."
And right now, that investment is happening across merchandising improvements vs. a primary focus on improving competitive pricing. "When it comes to talking about pricing vs. merchandising opportunities … the opportunities in merchandising, there were so many of them [that] they far outweighed [the number of] opportunities in pricing."
Shares of Supervalu were selling more than $1.15 higher at $7/92 per share in mid-morning trading. Supervalu reported better-than-expected improvements in sales, prompting many investors who had shorted the stock to cover their positions, according to a report in Reuters.