Supervalu lowers full-year adjusted EBITDA outlook
Staff Writer |
Supervalu is lowering its outlook for full-year adjusted EBITDA. Full year adjusted EBITDA is now expected to be approximately 5% lower than last year.
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Although recently announced new business in its Wholesale segment is expected to begin to positively contribute to results later this fiscal year, second quarter business performance in its Retail and Save-A-Lot segments has been softer than previously anticipated.
Commenting on the outlook for fiscal 2017, president and CEO Mark Gross said, "Although we are seeing softness in portions of our business, I am excited and encouraged by the recent announcements pertaining to new customers for our core Wholesale segment and the opportunities that exist to further grow that business.
"In addition to the already announced two new large customers, we have recaptured some previously lost business from two other customers. We look forward to adding the volume from these new customers and do not expect any meaningful customer losses for the remainder of this fiscal year."
The second quarter performance of Supervalu’s Retail segment has been impacted to a greater than anticipated degree by competitive openings and a challenging sales and operating environment for its stores.
The second quarter performance of Supervalu’s Save-A-Lot segment has been impacted by deeper levels of deflation as well as lower levels of SNAP (supplemental nutrition assistance program) benefits compared to the first quarter. These factors affecting the Retail and Save-A-Lot segments are expected to impact the second half of the fiscal year as well.
In addition, the second quarter performance at Save-A-Lot has been impacted by an aggressive rollout of store resets which is expected to benefit results at Save-A-Lot later in the year.
Supervalu now expects the second quarter identical store sales percentage for its Retail stores and for Save-A-Lot’s store network will be lower than the first quarter identical store sales percentage. The Company’s second quarter ends September 10. ■