Why Roundy's (RNDY) Stock Is Down Today

NEW YORK (TheStreet) -- Roundy's (RNDY) was falling -23.5% to $4.94 Thursday after missing analysts' estimates for earnings in the first quarter.

For the first quarter the grocery store operator reported earnings of 1 cent a share, missing the Capital IQ Consensus Estimate of 3 cents a share by 2 cents. Revenue grew 1.7% from the year-ago quarter to $1 billion. Analysts expected revenue of $1.01 billion for the quarter.

"During the first quarter of 2014, we continued to see softness in our core markets," chairman, president, and CEO Robert A. Mariano said in a press release. "Competitive pressure, weak economic growth and weather related issues affected our core markets in the quarter. Despite difficult same-store sales comparisons in the first quarter, we remain steadfast with our Milwaukee market renewal initiatives as we continue to implement strategic changes in select core markets."

Roundy's also announced that it entered an agreement to sell 18 of its Rainbow stores for $65 million. The deal is expected to close in the third quarter. The company is looking for additional buyers for the remaining nine Rainbow locations.

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TheStreet Ratings team rates ROUNDY'S INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ROUNDY'S INC (RNDY) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins."

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