Supervalu (NYSE:SVU) Miss Drags Down Grocery Sector

The shares of Supervalu (NYSE:SVU) plummeted today on their miss, dragging a number of other companies in the grocery sector down with them.

Supervalu has a loss of 95 cents a share for the third quarter, with adjusted earnings coming in at 24 cents a share, missing by far the 32 cents a share analysts were looking for.

Guidance was the game changer though, as Supervalu downwardly revised their number for 2011, now expecting a loss of $7.09 to $7.19 a share and adjusted earnings of $1.25 to $1.35 a share in 2011. Prior estimates were for a loss of $5.74 to $5.94 a share and adjusted earnings of $1.40 to $1.60 a share.

Analysts project earnings for 2011 for Supervalu of about $1.43 a share.

We've been talking about this at Everything Gold for some time, that we'll have to wait for earnings reports before celebrating the alleged boost in revenue for the third quarter for the retail sector as a whole, as the strategy by Supervalu to spend on promotions, in their case backfired, and left them where they're at. That may be the story of the grocery sector in general going forward, and possibly other retailers as well.

Supervalu was trading at $7.70, down $0.89, or 10.42 percent, as of 12:43 PM EST.