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The Cincinnati-based company also cut its 2018 guidance, and shares fell by more than 1 percent in premarket action as the broader market also fell.
The company, which operates 2,765 retail food stores, said it earned $317 million, or 39 cents per share (EPS), on revenue of $27.67 billion, compared to the year-earlier quarter when it earned $397 million, or 44 cents per share, on revenue of $27.75 billion.
Analysts had expected EPS of 43 cents and revenue of $27.65 billion.
Same-store sales, excluding fuel, rose 1.6 percent, less than the 1.65 percent Wall Street expected.
“We are strengthening the Kroger ecosystem by reducing costs and investing the savings in our associates, technology, and price to grow units, traffic and share,” CEO Rodney McMullen said in a statement.
During the three months ended Nov. 10, digital sales rose 60 percent, but total sales decreased 0.3 percent.
The company said its gross margin decreased 91 basis points from the year-earlier quarter but was up from the second quarter of 2018.
Kroger’s new full-year net EPS outlook is $3.80 to $3.95 compared to its earlier full-year EPS outlook of $3.88 to $4.03, reflecting the cost of its Ocado automated warehouse initiative. However, the company affirmed its adjusted full-year EPS guidance of $2 to $2.15.