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What: Grocery chain SUPERVALU
So what: SUPERVALU reported a loss including one-time items of $95 million for the quarter, or a profit of $0.24 if you exclude this non-recurring loss, on $8.67 billion in revenue. This compares to analysts' expectations of $0.32 on $8.7 billion in revenue. SUPERVALU stated that same-store sales dropped 4.9% while retail food sales saw an 8% slump. Add all of this together, and it becomes no surprise that the company also lowered its full-year outlook.
Now what: SUPERVALU has been a mess for a few years now, and investors are getting weary of waiting for the turnaround to happen. The company is having to aggressively slash prices in order to maintain customer loyalty but at the detriment of its margins. With food commodity costs on the rise and retail food prices falling, this recipe could cause heartburn for its shareholders. One week into the year, and it looks like this call to leave SUPERVALU alone might be the correct one.
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