A group of Supervalu investors have accused the US retailer of breaching federal securities law by distorting its earnings guidance in order to close a US$1bn note offering.

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Supervalu shareholders who bought shares between 23 April and 23 June, represented by the Shareholders Foundation, have claimed that the supermarket operator “disseminated highly positive guidance for the company’s financial performance for fiscal 2010 which may have been unsupported in order to close a $1bn note offering in May 2009”.


According to the investors, following the release of the positive guidance on 23 April Supervalu was able to increase its planned offering from $500m to $1bn, the proceeds of which was needed to pay down existing debt.


However, when the refinancing was complete – on 24 June – Supervalu revealed that first-quarter 2010 earnings would be substantially below expectations and that the previous guidance would be updated.


At the time, the company said that results would be down because consumers had become more “value focused and cautious in their spending” which “pressured sales and margins greater than anticipated.”

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Supervalu management said that it expected identical-store sales to be negative 3%.


As a result, Supervalu shares dropped almost 12% on “very heavy trading volume”, investors claim.


Shares in the company closed at over $16 per share on 23 June – before the announcement – and dropped to $13.60 per share the following day.


When contacted by just-food, a Supervalu spokesperson said: “As a matter of policy, Supervalu does not comment on pending litigation.”