Shares of SuperValu Inc. fell $1.85, of 15 percent, the most in 20 months after the Eden Prairie-based grocer lowered its earnings forecast for 2011, saying improvements will take longer than originally planned.
The company said today that profit, excluding some items, will be at least $1.40 a share. The company's previous forecast was at least $1.75. The average estimate of analysts surveyed by Bloomberg was $1.66.
Sales declined for the sixth straight quarter, dragged down by a "difficult operating environment," Chief Executive Officer Craig Herkert said in a statement. The grocer faces increasing competition from discount retailers such as Wal-Mart Stores Inc. and Target Corp., which also are offering more fresh food.
"It will take longer than originally anticipated to realize the benefit of the marketing, merchandising and operational initiatives that we continue to build upon," Herkert said.
SuperValu slumped $1.85 to $10.55 at 4 p.m. in New York Stock Exchange composite trading, the biggest decline since February 2009. The stock was the worst performer in the Standard & Poor's 500 Index today.
The second-quarter net loss was $1.47 billion, or $6.94 a share, compared with a profit of $74 million, or 35 cents, a year earlier. The bulk of the expense came from a $1.6 billion pretax writedown on the value of goodwill and intangible assets.