Supermarket chain Kroger’s forecast disappoints, shares down


(Reuters) – Kroger Co’s (KR.N) full-year profit forecast came in largely below estimates as the supermarket chain spends more on its online operations and cuts prices to snatch customers away from Walmart Inc (WMT.N) and Inc (AMZN.O), sending its shares down as much as 7 percent. FILE PHOTO: A logo of Kroger is displayed on a monitor above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., December 5, 2017. REUTERS/Lucas JacksonThe company said it would make capital investments $3 billion in 2018, excluding acquisitions and purchases of leased facilities. Kroger has been revamping its nearly 2,800 supermarkets, bolstering in-store technology, investing in making online ordering smoother and offering delivery options such as curbside pickup. The Cincinnati-based company has also been cutting the fat out of its business. Last month the company sold 800 convenience stores to British gas station operator EG Group for $2.15 billion. The company said it expects full-year 2018 earnings of $1.95 per share to $2.15 per share, largely below the $2.15 analysts were expecting on average, according to Thomson Reuters I/B/E/S. Sales rose 12.4 percent to $31.03 billion the fourth quarter ended Feb. 3, slightly above analysts’ expectation of $30.83 billion. Identical same-store sales in the fourth quarter rose 1.5 percent, slightly above the estimate of 1.45 percent. Net earnings attributable to Kroger rose to $854 million, or 96 cents per share, from $506 million, or 53 cents per share, a year earlier. Kroger’s shares, which have gained about 16 percent in the past six months, were down 7 percent in premarket trading. Reporting by Nivedita Balu in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb ChakrabartyOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters