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SUPERVALU Inc F4Q08 (Qtr End 02/23/08) Earnings Call Transcript

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2008-04-17 12:42:08.0

Tags: SUPERVALU Inc.

Question-and-Answer Session

Operator

Yes. (Operator Instructions) Your first question comes from the line of Ed Kelly.

Jeffrey Noddle

Operator, we're not hearing a question.

Operator

Mr. Kelly, your line is open.

Ed Kelly - Credit Suisse

Hi, Jeff, good morning. Sorry about that.

Jeffrey Noddle

Good morning, Ed.

Ed Kelly - Credit Suisse

Could you maybe just give us a little bit color on your supply chain services business this quarter, the performance was obviously very strong, a lot better than most of us were expecting, but could you just talk about what drove that?

Jeffrey Noddle

Yeah, we did have exceptionally strong quarter and a terrific year in supply chain. It’s a number of different things we were able to begin to add some new business as the year progressed. Our attrition rate was lower than we would have expected at the beginning of the year. We really did well in all components of it. Pam mentioned a few miscellaneous items that impacted, but overall we had a strong year.

I think Ed, if I was to describe what I think, I think that independent retailers are beginning to see the benefits of our leveraging scale with that many business there in Minneapolis by independent retailer groups, where we are showing them are innovations centers, showing them what we're doing in terms of own brands, in terms of leveraging our scale with national vendors.

I think there is beginning to be recognition that there are some very powerful programs that they can attach to. But we really had a solid year. We just had good volume and we are continued to leverage our expense rations, but that business is a lot about being able to continue to improve our productivity. We've been able to do that over the years and we continue this year very strongly, we had a very strong year.

Ed Kelly - Credit Suisse

Can you just help us in looking, where the business is going next year, I mean you talked about 2% to 4% attrition, but you are obviously getting new business and you have got target kind of beginning to cycle out, do you do better than that 2% to 4% attrition on a sales perspective?

Jeffrey Noddle

Well, setting aside the attrition rate, I believe we're accordingly going back to normal 2% to 4% does not include target impact. And I'd hope we have not to do better that number without the target. We haven't given any specific guidance on what our volumes will be for the year and all of course is included on our guidance range of earnings.

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