Supervalu Remains Under Pressure

Supervalu posts a 40% plunge in first-quarter earnings.
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NEW YORK (

TheStreet

) --

Supervalu

(SVU)

reported a 40% plunge in first-quarter profit, as the grocery sector remains trapped in a pricing war.

During the quarter, the company earned $67 million, or 31 cents a share, compared with $113 million, or 53 cents, in the year-ago period.

Excluding after-tax charges, Supervalu would have earned 43 cents a share, beating analysts' estimates by a penny.

Revenue dropped 9.6% to $11.5 billion, as Supervalu shuttered locations and exited markets, which it continues to do.

This follows rival

Safeway's

(SWY)

disappointing second-quarter results. The grocer also saw its profit tumble 40%. As a result, Safeway cut its full-year outlook, saying it doesn't expect a rebound until the fourth quarter.

Traditional grocers have been pressured as discounters like

Wal-Mart

(WMT) - Get Report

and

Target

(TGT) - Get Report

ramp up their fresh and processed food offerings.

Shares of Supervalu are up 2.2% on the day, to $11.83.

--Reported by Jeanine Poggi in New York.

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