Quick reports do not support "sub-group breaks", because there is no way to know which is the dominant and which is subordinate break element. So it ends up breaking on the last element specified as a group break. In your case, that would be the date element. But, also in your case, the date element is the subordinate sort element, so you end up with data sorted primarily by item and broken primarily by date.

If you need sub-group breaks use the report designer, so you can specify which break is dominant.