SUPERVALU INC. (SVU) swung to a net loss for the quarter ended Dec. 03, 2016. The company has made a net loss of $26 million, or $ 0.10 a share in the quarter, against a net profit of $34 million, or $0.13 a share in the last year period. Revenue during the quarter went down marginally by 1.38 percent to $3,003 million from $3,045 million in the previous year period. Gross margin for the quarter contracted 77 basis points over the previous year period to 13.55 percent. Total expenses were 99.97 percent of quarterly revenues, up from 97.83 percent for the same period last year. That has resulted in a contraction of 213 basis points in operating margin to 0.03 percent.
Operating income for the quarter was $1 million, compared with $66 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $107 million compared with $125 million in the prior year period. At the same time, adjusted EBITDA margin contracted 54 basis points in the quarter to 3.56 percent from 4.11 percent in the last year period.
"The successful sale of Save-A-Lot early in the fourth quarter provides SUPERVALU with additional flexibility to operate and grow our business," said president and chief executive officer Mark Gross. "Additionally, our Wholesale team has done a tremendous job delivering for our customers. It is a significant accomplishment that we increased Wholesale sales compared to last year given the sales lost at the end of fiscal 2016. Unfortunately, in our Retail segment we have not been able to overcome persistent deflation, competitive impacts, and other factors. It takes time to change customers’ shopping habits, but our team is dedicated to improving our results."
Operating cash flow declinesSUPERVALU INC. has generated cash of $216 million from operating activities during the nine month period, down 14.29 percent or $36 million, when compared with the last year period. The company has spent $201 million cash to meet investing activities during the nine month period as against cash outgo of $198 million in the last year period. It has incurred net capital expenditure of $116 million on net basis during the nine month period, up 4.50 percent or $5 million from year ago period.
The company has spent $8 million cash to carry out financing activities during the nine month period as against cash outgo of $34 million in the last year period.
Cash and cash equivalents stood at $47 million as on Dec. 03, 2016, down 45.98 percent or $40 million from $87 million on Dec. 05, 2015.
Working capital turns negative
Working capital of SUPERVALU INC. has turned negative to $747 million on Dec. 03, 2016 from positive $81 million on Dec. 05, 2015. Current ratio was at 0.71 as on Dec. 03, 2016, down from 1.05 on Dec. 05, 2015.
Cash conversion cycle (CCC) has decreased to 6 days for the quarter from 10 days for the last year period. Days sales outstanding were almost stable at 13 days for the quarter, when compared with the last year period.
Days inventory outstanding has decreased to 14 days for the quarter compared with 35 days for the previous year period. At the same time, days payable outstanding went down to 34 days for the quarter from 38 for the same period last year.
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