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Shares of Supervalu, Inc. slid 12 percent on Wednesday in the wake of the supermarket chain’s warning that its first quarter earnings would be “substantially below” analyst expectations.
Shares of Supervalu fell to $13.52 yesterday, following the Minneapolis-based retailer’s updated guidance that a weaker-than-expected economic environment, coupled with price-cutting initiatives and higher levels of promotional spending, were the chief culprits responsible for hampering its same-store sales and net earnings during the first quarter ended June 20.
“Since providing guidance on our fourth-quarter earnings call, consumers have become more value focused and cautious in their spending, which has pressured sales and margins greater than anticipated,” said Supervalu’s newly appointed CEO, Craig Herkert. Aside from the earnings slide, the company also anticipates same-store sales to fall 3 percent. “Supervalu has significant potential, and I look forward to sharing with you my thoughts and vision for the business in the months ahead,” said the former Wal-Mart executive, who was named to succeed Supervalu’s longtime chief executive, Jeff Noddle, roughly a month ago.
Herkert said Supervalu would update annual guidance on July 28 with its first-quarter earnings release, and added that he is “engaged in a full review of … operations and support functions.”