Supervalu Earnings: 3 Things to Watch


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Ignore the noise and focus on these three factors when Supervalu reports earnings next week.

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Supervalu Earnings: 3 Things to Watch

  1. 1. SUPERVALU’s Earnings: 3 Things to Watch Source: SUPERVALU
  2. 2. Different Parts of the Company
  3. 3. 1. Save-A-Lot Same-Store Sales Though only accounting for a quarter of revenue, this represents the greatest hope for future growth.
  4. 4. 1. Same-Store-Sales Trends
  5. 5. 1. Same-Store-Sales Trends Because sales for last year’s second quarter were so poor, and because of the positive momentum the company seems to be showing, investors should be hoping for at least a 2% uptick in same- store-sales.
  6. 6. 2. Keeping an Eye on Wal-Mart’s New Stores Wal-Mart remains the company’s biggest threat.
  7. 7. 2. The Wal-Mart Threat • Over the past 10 years, Wal-Mart has become the dominant player in value-priced grocery stores. • The company now accounts for 25% of all grocery purchases in the U.S. • The company’s Neighborhood Markets look to compete for the same type of locations and demographics that Save-A-Lot serves.
  8. 8. 2. The Wal-Mart Threat • This will require some extra homework on the part of the individual investor. • Listen in to what Wal-Mart’s management has to say about the success of Neighborhood Markets when the company reports earnings in mid- August. • If the stores are gaining traction, it could mean a loss of potential business for Save-A-Lot.
  9. 9. 3. Other Grocery Brands The company’s Cub Foods and Rainbow branded stores are expanding in the Twin Cities.
  10. 10. 3. Expansion of Other Grocery Brands • Though SUPERVALU’s standard grocery stores fetch the best margins, they are also the segment that’s had the hardest time maintaining sales. • A recent purchase of stores in Minneapolis may signal renewed interest in non-Save-A-Lot brands. • Listen in to the conference call to see how management wants to move forward with these brands.
  11. 11. SUPERVALU once had a dividend stock that yielded around 5%. Those who bought it, however, lost out when the company discontinued its payout. Recognizing the difference between a solid dividend stock and a flash-in-the-pan is crucial. Knowing that, our top analysts have put together a list of the best dividend players for your portfolio right now: