It looks to me like you've got broken plastic on the valve.
My dh has replaced the kitchen and bathroom sink fixtures several times and the big lesson learned is that the kits for doing it yourself usually don't include all the parts you need. (They leave out stupid things, like a specific washer, or o-ring.) Youtube has been a LIFESAVER. Double check to make sure there's nothing specific to that brand that you need for installation. (We've had to order things from the manufacturer.) Plumbing supply places have more in stock than Home Depot, if you have one near you.
(The first time we ended up calling a plumber because it was just too frustrating, but he found a friendly one who explained the missing parts and dh learned what to look for.)