Kroger's Quarterly Sales, Profit Miss As Competition Hurts
US supermarket chain Kroger Co missed Wall Street estimates for quarterly sales and profit on Thursday, hurt by stiff competition from industry stalwarts including Walmart Inc and Amazon.com Inc.
Kroger also said it divested its interest in Lucky's Market, a specialty grocery store chain, and took a related non-cash impairment charge of $238 million (€214.49 million) in the third quarter.
The grocer made an investment in Lucky's Market in 2016 to venture into the natural, organic and locally grown space, a growing market.
The company has been investing heavily as part of its 'Restock Kroger' transformation program to grow online sales, improve delivery and modernise stores to gain market share.
Still, Kroger's digital sales for the quarter rose only 21%, compared with the 31% increase in the second quarter.
Net sales rose 0.5% to $27.97 billion (€25.21 billion), lower than analysts' estimate of $28.18 billion (€25.40 billion), according to IBES data from Refinitiv.
Excluding one-time items, the company earned 47 cents per share, 2 cents lower than expectations.
Net earnings attributable to Kroger fell to $263 million (€237.02 million), or 32 cents per share, in the third quarter ended 9 November, from $317 million (€285.69 million), or 39 cents per share, a year earlier.
Excluding the impact of fuel prices, sales at company stores open for more than a year rose 2.5%. Analysts had expected 2.33% growth.