Where SUPERVALU Inc (NYSE:SVU) Stands In Terms Of Earnings Growth Against Its Industry
Understanding how SUPERVALU Inc (NYSE:SVU) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how SUPERVALU is doing by comparing its latest earnings with its long-term trend as well as the performance of its consumer retailing industry peers. Check out our latest analysis for SUPERVALU
Was SVU’s weak performance lately a part of a long-term decline?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine many different companies on a more comparable basis, using new information. For SUPERVALU, its latest trailing-twelve-month earnings is -$21.0M, which, in comparison to the previous year’s level, has turned from positive to negative. Given that these values may be relatively short-term, I’ve estimated an annualized five-year figure for SVU’s earnings, which stands at -$92.3M. This means though net income is negative, it has become less negative over the years.
Additionally, we can assess SUPERVALU’s loss by looking at what’s going on in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over the last few years has been negative at -11.54%. The key to profitability here is to make sure the company’s cost growth is well-managed. Inspecting growth from a sector-level, the US consumer retailing industry has been growing, albeit, at a subdued single-digit rate of 2.95% in the prior twelve months, and a flatter 0.25% over the past couple of years. This means that any recent headwind the industry is enduring, it’s hitting SUPERVALU harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most useful step is to assess company-specific issues SUPERVALU may be facing and whether management guidance has steadily been met in the past. You should continue to research SUPERVALU to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for SVU’s future growth? Take a look at our free research report of analyst consensus for SVU’s outlook.
2. Financial Health: Is SVU’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 09 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
