Will SUPERVALU's (SVU) Wholesale Business Drive Q4 Earnings?
Zacks Investment Research | Apr 17, 2018 10:11PM ET
SUPERVALU INC. (NYSE:SVU) is scheduled to report fourth-quarter fiscal 2018 results on Apr 24, before the market opens. This grocery dealer delivered bottom-line surprises in three of the trailing four quarters. While the company has been struggling with its retail business, its performance in the wholesale arena is laudable. Considering these, let’s delve into how things are shaping up for the upcoming announcement.
Wholesale Business Looks Sturdy
SUPERVALU’s wholesale business has been an aspect of joy for the company for a while. The company derives a major portion of its revenues from this segment. Notably, sales from this segment grew 52% year over year to $2,888 million in third-quarter fiscal 2018, representing roughly 73% of the company’s total revenues. Further, the company has been undertaking endeavors to fortify foothold in the wholesale arena, primarily through acquisitions. In this regard, the company concluded the buyout of Associated Grocers of Florida in the beginning of the fourth-quarter fiscal 2018, while it bought Unified Grocers in June 2017. Notably, Unified Grocers contributed sales worth about $860 million to SUPERVALU’s Wholesale business during the third quarter. The company is on track to generate targeted synergies from this buyout.
Apart from this, the company has supply agreements with retailers like America’s Food Basket, which is expected to fuel sales in the segment. Also, management is committed toward enhancing operating efficiency, reducing costs as well as optimizing distribution channels, information technology and logistics to support the growth of the wholesale business.
SUPERVALU INC. Price, Consensus and EPS Surprise
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