SUPERVALU Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of SUPERVALU (NYS: SVU) sank as much as 11% today after the grocery store operator's quarterly results and full-year guidance missed Wall Street expectations.

So what: SUPERVALU has been trying to compete amid a harsh economic environment, but its third-quarter results -- net loss widened to $750 million versus a loss of just $202 million in the year-ago period -- are giving investors good reason to remain skeptical. Fierce pricing pressure from larger rivals Safeway and Kroger, rising food costs, and a cautious consumer are all weighing heavily on SUPERVALU's bottom line, suggesting that a turnaround isn't going to happen anytime soon.

Now what: Looking ahead, the company now sees full-year 2012 revenue of $36.1 billion -- down from its prior view of $36.5 billion -- and scaled back plans to expand its Save-A-Lot chain. Of course, when you consider that SUPERVALU continues to generate decent free cash flow, continues to pay down debt, and continues to sport a paltry forward P/E, the stock seems like a decent long-term bet on management's recent initiatives. "The tools we have implemented are beginning to improve retail execution and position us to deliver greater value to our customers in fiscal 2013," CEO Craig Herkert said.

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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of SUPERVALU. Motley Fool newsletter services have recommended buying calls in SUPERVALU. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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