Supervalu reports 3rd quarter results Tuesday, too early for turnaround

Earnings Preview: Supervalu reports Q3 Tuesday

PORTLAND, Ore. — Supervalu Inc. reports its fiscal third-quarter earnings Tuesday. The following is a summary of key developments and analyst opinion related to the period.

OVERVIEW: Supervalu is in the early stages of an attempt to draw back consumers it lost during the economic downturn.

Among the nation’s largest grocers, Supervalu has been among those performing poorest. The operator of Albertsons, Jewel-Osco and Save-A-Lot stores has seen its profit fall for some time as consumers became more selective and as food prices fluctuated.

Supervalu said shoppers are coming into its stores less often, buying fewer items and continuing to trade down to less expensive items, adhering to shopping lists and avoiding discretionary purchases.

Craig Herkert, a former Wal-Mart Stores Inc. executive who took over as Supervalu’s CEO last spring, announced during the third quarter that the company was revamping its strategy to better serve consumers whose shopping habits may be forever changed by the recession.

The company plans to double the number of low-price Save-A-Lot stores it operate, cut prices in all its stores and reorganize its operations. The company cut its dividend to pay for the changes, which aren’t expected to take full effect until the first quarter.

BY THE NUMBERS: Analysts surveyed by Thomson Reuters expect the company to earn 40 cents per share on revenue of $9.43 billion for the quarter.

WHAT’S AHEAD: The company recently lowered its earnings guidance and now expects to earn between $1.95 per share and $2.05 per share for 2010.

Investors will be eager to hear updates from the Minneapolis-based company on its plan to bring back more of its customers.

STOCK PERFORMANCE: Share of Supervalu fell nearly 17 percent during the quarter and nearly 27 percent in the past 52 weeks. They closed Friday at $12.87.