Earnings Preview For Supervalu, Inc. (SVU)

Supervalu, Inc. SVU reports 2011 fiscal fourth-quarter earnings before the opening bell on Thursday, April 14. Analysts expect the company to post a profit of $0.34 on sales of $8.75 billion. The company has missed analyst estimates in each of the past two quarters. There are a few items that investors will be focusing on. First of all, management needs to shed light on cost inflation and its ability to pass it on to the consumer. It operates in a highly competitive space, so this is no easy task. Also, investors will look at the impact of fierce competition on its margins. The stock is currently valued at 7x 2011 estimates of $1.29 per share. Despite the cheap valuations, the stock has performed poorly over the past year and is much closer to its 52-week low than its high. Investors need clarity on cost pressure in order to push the stock higher. Also, the company is heavily indebted, so the company needs to have a plan of action to pay down its debt. Supervalu operates retail food stores in the United States. The company's stores offer general merchandise, health and beauty care, pharmacy, and fuel products under the under the Acme, Albertsons, Cub Foods, Farm Fresh, Hornbacher's, Jewel-Osco, Lucky, Save-A-Lot, Shaw's, Shop 'n Save, Shoppers Food & Pharmacy, and Star Market banners, as well as in-store pharmacies under the Osco and Sav-on banners.