Supervalu (SVU) Stock Stumbles as Q1 Earnings Fall Short

Supervalu (SVU) stock is sharply lower on Wednesday morning after the wholesale distributor posted lower-than-expected earnings for the 2017 fiscal first quarter.
By Kaya Yurieff ,

NEW YORK (TheStreet) -- Shares of Supervalu (SVU) are dropping 6.72% to $4.93 on Wednesday morning after the company reported weaker-than-expected earnings for the 2017 fiscal first quarter.

Before today's opening bell, the Eden Prairie, MN-based wholesale distributor posted adjusted earnings of 19 cents per diluted share, below analysts' estimates of 22 cents per share.

Revenue came in at $5.2 billion, above analysts' forecasts of $5.3 billion.

"We're making great progress in growing our business as evidenced by our recent business announcements regarding our agreement with Marsh Supermarkets and our agreement to acquire 22 Food Lion grocery stores," CEO Mark Gross said in a statement.

Earlier this month, Supervalu was named the primary wholesaler and services provider to Marsh Supermarkets.

"We're also seeing great success in growing our wholesale produce business, and I believe we'll sell more produce to our wholesale customers this fiscal year than our wholesale business has sold before," Gross added.

Separately, TheStreet Ratings Team has a "Hold" rating with a score of C on the stock.

The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth and increase in net income.

But the team also finds weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

You can view the full analysis from the report here: SVU

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