US: Weak US economy hits Supervalu

22 July 2008 | Source: just-food.com

Concerns over the US economy and rising food and fuel prices have caused retail giant Supervalu to reduce its annual sales forecast.

The company said today (22 July) that it expects same-store sales, excluding fuel, to rise 0.5% for its current fiscal year, down from a previous forecast of growth of 1-2%.

The downbeat outlook came after Supervalu saw higher energy costs and price cuts erode food retail earnings during its first quarter.

Retail food operating earnings reached US$399m for the three months to 14 June, down from $449m a year ago. Net sales were flat at $13.3bn as retail food net sales dipped 0.7%.

Chairman and CEO Jeff Noddle said: "The ongoing weakness in the economy combined with higher food and energy inflation has created conditions that make us take a more cautious view for the balance of the fiscal year."

Supervalu also lowered its forecast for earnings per share, predicting that underlying earnings - excluding one-time costs - would reach $3.04-3.20, against previous guidance of $3.10-3.25.

just-food.com