The company said its second quarter results included the net after tax charges of approximately $45 million or 31 cents per diluted share related to the plan to sell 20 Pittsburgh stores, start-up costs related to growth initiatives and the losses incurred from Hurricane Katrina.
Within the company's retail food segment's Q2 retail net sales were $2.5 billion, flat with the same period last year. Executives said that static sales performance was a reflection of new store openings substantially offset by the impact of higher store closings, primarily at Save-A-Lot, as well as a more competitive retail environment. Same-store sales fell 1.6%, including flat comparable store sales at company-operated Save-A-Lot stores.
New store activity since last year's second quarter, including licensed stores, resulted in 79 new stores, opened and acquired, and 39 store closings for a total of 40 net new store openings. During the last year, new store openings include 69 extreme value stores, and 10 regional banner stores.
The company also revised its guidance, saying comparable-store sales, when adjusted for planned in-market store expansion, are projected to be flat for the remainder of the year. Store development plans, including licensee stores, are projected to be approximately 65 to 75 extreme value stores and approximately 10 to 12 new regional banner stores. Regional banner major and minor remodels are estimated at approximately 40 stores. Total store closings for the year are projected to be approximately 52 units, primarily Save-A-Lot stores as well as the stores associated with the plan to sell 20 Pittsburgh stores.
Supervalu is expecting a diluted earnings per share range of $1.88 to $1.98, which includes charges of 41 cents per share related to the plan of exiting the Pittsburgh market. "We are confident that the many initiatives we have underway will be strong contributors to our future progress," said Jeff Noddle, chairman and chief executive officer. "We remain committed to achieving our new 18% long-term return on invested capital goal."
Supervalu's network consists of 1,553 stores in 40 states, including 1,285 extreme value stores. Of those, 286 are corporate-owned Save-A-Lot stores, 861 are licensed Save-A-Lot stores, and 138 Deals stores. Supervalu also owns 268 regional banner stores including Cub Foods, Shop 'n Save, Shoppers Food & Pharmacy, bigg's, Farm Fresh, Scott's Foods and Hornbacher's stores.
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