Supervalu?s Messy Quarter Sends Shares Plummeting

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Supervalu (SVU) missed third quarter revenue expectations and lowered its sales guidance, sending shares down 10% early.

Supervalu posted 24 cents of EPS, a penny below expectations. Its $8.33 billion in revenue fell below expectations for $8.42 billion. Gross margin inched ahead, but the company’s same-store sales forecast painted a bleak picture. Supervalu said same-store sales will dip 2.5% to 3% in fiscal 2012, which ends in March. Previously, the company had expected a drop of 2% to 2.5%.

Citi analyst Deborah Weinswig sees other trouble spots.

“We are concerned that SVU’s identical store sales experienced the first sequential deceleration since F4Q11, and we expect price competition from Wal-mart (WMT) and alternative formats to continue to heat up in the coming quarters. Additionally, we note that management tempered its expectations for Save-ALot store growth for F2012, which we believe will weigh on topline growth ahead.”

Original Article Source by Barrons.com