Kroger cuts profit outlook as comparable-store sales fall
- Author: Zachary Reyes Jun 15, 2017,
Jun 15, 2017, 20:09
German hard discounter Lidl is opening its first USA stores - 10 of them - in Virginia and Carolina today, while fellow German grocery giant Aldi unveiled plans earlier this week to open close to 900 stores in the U.S. over the next five years and give a facelift to its existing United States portfolio.
"Customers tell us they want to. provide meals to their families at prices that enable them to stretch their budgets".
"We remain focused on our strategy", CEO Rodney McMullen said in a press release.
Still, Moody's vice president Mickey Chadha said the pressure to lower prices is only likely to grow this year, which could trim profits. But Kroger's shares are anything but stable today after the grocer cut its guidance. In the first quarter previous year, the company saw a 2.4% increase in same-store sales.
Sales at established Kroger stores fell for the second straight quarter after more than seven years of consecutive growth, signaling the competitive pressure that the supermarket is facing. Over the first three months of the year, the company said revenues dropped almost 5% from the 2016 period to $36.3 billion as sales at stores open at least 12 months, excluding fuel, slipped 0.2%.
The company said its profit declined to $546 million, or $0.58 per share.
For the quarter, the company earned $303 million, or 32 cents per share.
The company recorded a $126 million charge related to pension plan withdrawal liabilities and a $117 million expense for offering voluntary retirement to employees.
Adjusted net earnings of US$546mln, or 58 cents per share, were well down on the previous year's US$696mln, equivalent to 71 cents per share.
The Cincinnati-based supermarket chain reported Q1 earnings per share (EPS) of $0.58, which was in-line with the Wall Street consensus estimate of $0.58.