Supervalu's stock down after posting a mixed quarter

Supervalu Inc. on Tuesday posted a mixed quarter, ­beating Wall Street's profit forecasts but falling short of growth expectations for its national discount chain ­Save-A-Lot.

Investors bailed, sending Supervalu's stock down more than 7 percent. Still, Supervalu's long-term turnaround seems to be on track, as the company completed its fiscal year with continued sales growth at supermarkets.

The Eden Prairie-based food wholesaler and retailer recorded net profit of $36 ­million, or 13 cents per share, for the three months ended Feb. 28, down from $42 million, or 15 cents per share, in the same period a year ago. Adjusting for one-time items, Supervalu, the owner of Cub Foods, had earnings of $66 million, or 24 cents per share, up from $50 million, or 18 cents.

Stock analysts polled by Thomson Reuters were expecting per-share profits of 21 cents and fourth-quarter sales of $4.39 billion.

Supervalu reported sales of $4.36 billion. Excluding a 53rd week in Supervalu's 2015 ­fiscal year, its fourth-quarter sales rose 2.5 percent.

"After leading Supervalu for two years, I'm confident we can continue the momentum we have built as we head into our new fiscal year," CEO Sam Duncan told stock analysts in a conference call.

Since Duncan took Supervalu's reins in 2013, Supervalu's stock has gone from less than $4 per share to nearly $12 two weeks ago. But it's pulled back since, and Tuesday, the stock closed at $9.89.

"While the company has made progress in its turnaround, risks to the story remain, the path to EBITDA growth appears limited in the near term and valuation looks full," he said. EBITDA refers to earnings before interest, taxes and depreciation.

Positives sales trends at Save-A-Lot slowed during the fourth quarter. The deep discount chain, which is akin to Aldi, is seen as Supervalu's best bet for sales and profit growth. During the fourth quarter, Save-A-Lot posted a 3.6 percent increase over a year ago in same-store sales, an important financial gauge.

But analysts on average were expecting same-store sales growth of 5.4 percent at Save-A-Lot, Oppenheimer analyst Rupesh Parikh wrote in research note Tuesday.

Overall, Save-A-Lot had $1.14 billion in fourth quarter sales. Its adjusted operating earnings rose 16 percent.

Same-store sales in Supervalu's conventional grocery arm, which includes Cub Food stores, experienced a 1.1 percent increase to $1.22 billion. That marked the fifth consecutive quarter of positive retail same-store sales, after that benchmark had previously fallen for two straight years. The division's adjusted operating profits rose 10 percent.