In a note to clients on Tuesday, the firm said operating expenses were up 22% to $500.6 million, compared with a forecast of 14.7%, reflecting higher store count, a sharp increase in SS employee and operating expense run rates, and higher credit card fees.
Analysts said there was a slower than expected recovery in prepared food, reflecting the lingering impact of COVID-19 on demand. Inside store SSS was up 6%, although mix was different than expected with strong grocery segment performance offsetting the slower recovery in prepared food, RBC said.
The company's price target was lowered to $220 from $345, while analysts maintained the sector perform rating on the stock.
Price: 189.45, Change: -11.77, Percent Change: -5.85
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