Kroger misses in Q3 as net income falls

Kroger Co. lowered the higher end of its full-year adjusted profit forecast amid a “difficult” operating environment, marked by falling food prices and increased competition.



The nation’s largest grocery store operator reported net earnings of $391 million, or $0.41 per diluted share, and identical supermarket sales growth, without fuel, of 0.1% in the third quarter, which ended on Nov. 5. Net earnings in the same period last year were $428 million, or $0.43 per diluted share.



Total sales increased 5.9% to $26.6 billion in the third quarter, compared to $25.1 billion in the year-ago period.



"I am proud of our associates for continuing to connect with our customers in a difficult operating environment. “Deflation persisted as we expected during the quarter, said chairman and CEO Rodney McMullen. “We are firmly focused on our long-term strategy of improving our connection with customers and associates, and continue working on process changes to lower costs. We don't change our strategy based on quarterly swings in results. We remain committed to delivering on our long-term earnings per share growth rate guidance."



Kroger narrowed its net earnings guidance range to $2.03 to $2.08 per diluted share for 2016. The previous guidance range was $2.03 to $2.13. Kroger's adjusted net earnings guidance range per diluted share for 2016 is $2.10 to $2.15, which excludes the $0.07 charge from the company's commitment to restructure certain multi-employer pension obligations in the second quarter. The previous adjusted guidance range was $2.10 to $2.20.