Kroger shares crash as sales disappoint
Channel: Good America
Date: 2018-09-13

Kroger's same-store sales for the second quarter come up short of analysts' estimates.
The retailer continues to make investments online, which hurts profit margins.
Kroger CFO on earnings beat, comp sales miss Kroger CFO on earnings beat, comp sales miss  
1 Hour Ago | 05:00
Kroger shares fell more than 9 percent Thursday morning as the retailer reported quarterly sales that disappointed analysts and investors.

Sales at Kroger stores open for at least 12 months, excluding fuel, climbed just 1.6 percent, coming up short of the 1.9 percent growth Wall Street had anticipated, based on a poll of analysts by Thomson Reuters.

That's against a backdrop of strong consumer confidence in the U.S. and record-low unemployment, with many shoppers expected to open up their wallets more through this holiday season. Retailers including Walmart, Target and Macy's all reported solid earnings results for the latest quarter, and many retail companies are hiking their profit outlooks for the full year.

Kroger, which owns its namesake chain and Fred Meyer, Ralphs and Roundy's, continues to sacrifice profit as it makes investments to bulk up its e-commerce platform. That effort includes buying meal-kit company Home Chef and partnering with logistics tech firm Ocado for online delivery.

Kroger shares tumbled when Amazon announced it was going to acquire Whole Foods. Kroger has since sold off its convenience store business to U.K.'s EG Group, vowing to pay down debt and focus on its supermarkets.

Kroger said net income climbed to $508 million, or 62 cents per share, in the second quarter ended Aug. 18, from $353 million, or 39 cents a share, one year ago. Excluding one-time items, Kroger earned 41 cents, while analysts were calling for earnings of 38 cents a share.

Revenue climbed to $27.87 billion from $27.60 billion a year ago, falling short of the $27.95 billion that analysts were expecting.

"All in all, this was not the print the bulls were hoping for," J.P. Morgan analyst Ken Goldman said in a note to investors.

Kroger shares have risen about 15 percent this year, bringing the retailer's market cap to roughly $25.3 billion.