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Supermarket giant cuts profit outlook


The Kroger Co. lowered its earnings guidance amid a decline in Q1 same-store sales as price competition in the supermarket industry intensifies.

Sales rose 4.9% to a better-than-expected $36.3 billion for the quarter ended May 20, up from $34.6 billion last year. Same-store sales excluding fuel declined 0.2%, the second consecutive quarter of decline.

Net income totaled $303.0 million, or 32 cents per share, down from $696.0 million, or 72 cents per share, for the same period last year. Adjusted EPS was 58 cents, in line with forecasts. Kroger recorded a $25 million LIFO charge in the first quarter of 2017, compared to a $15 million LIFO charge in the same period last year.

"We are driving our strategy of lowering costs to reinvest in ways that provide the right value to our customers," said Kroger chairman and CEO Rodney McMullen. "We're pleased that identical supermarket sales in the last nine weeks of the first quarter were positive, and that has continued in the second quarter to date."

Kroger expects full-year earnings in the range of $2 to $2.05 per share, down from its previous guidance of $2.21 to $2.25 per share.
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