Supervalu (SVU) shares were socked Tuesday after the grocer lowered its profit targets for the fiscal year, noting weaker sales and customer headwinds.
Shares -- which already were trading near 52-week lows ahead of the news -- recently were down $4.91, or 14%, to $29.38.
The Minneapolis-based company said it now expects fiscal 2008 earnings of $2.91 to $2.97 a share, before one-time acquisition related costs. That's down from its prior forecast for earnings of $2.93 to $3.03 a share.
Supervalu also lowered its sales view, projecting same-store growth of 0.5% to 1%. In October, it projected sales growth at the low end of a 1% to 2% range.
The company said its outlook reflects assumptions that consumer spending will continue to be pressured by inflation -- an issue that has slammed supermarket operators as they face higher food costs that must be passed on to customers.
For the third quarter ended Dec. 1, Supervalu's profit rose to $141 million, or 66 cents a share, from $113 million, or 54 cents a share, a year earlier. Analysts, on average, anticipated earnings of 63 cents a share, according to Thomson Financial.
Sales slipped to $10.21 billion from $10.66 billion the prior year. Wall Street expected a top line of $10.17 billion.
Retail sales fell to $7.86 billion from $8.41 billion a year earlier, which the company said was softer than its expectation. Identical-store sales inched up 0.5%, excluding fuel.
This article was written by a staff member of TheStreet.com.