Supervalu Cuts Outlook as Profit Falls

MINNEAPOLIS (TheStreet) - Supervalu(SVU Quote) posted a 42% plunge in its second-quarter profit and slashed 10 cents off its full-year forecast.

The news sent the company's shares sinking 1.4% to $16.70 in pre-market trading.

During the quarter, Supervalu earned $74 million, or 35 cents a share, compared with $128 million, or 60 cents, in the year-ago period. Analysts were expecting a profit of 33 cents a share.

Supervalu said it was hurt by shoppers cutting back on purchases, deflationary pressure, and significant promotions.

Sales slipped 7.5% to $9.46 billion from $10.22 billion last year.

Looking ahead, the grocer now expects full-year earnings in the range of $2.01 to $2.11 a share, compared with a prior forecast of $2.01 to $2.21 a share.

Last week, rival Safeway(SWY Quote) reported a 36% decline in its quarterly profit, beating Wall Street's forecast.

-Reported by Jeanine Poggi in New York.

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