(Updated with stock prices.)
) -- Supermarket giant
swung to a loss in its third quarter and cut its forecast for the remainder of the year.
During the quarter, the company recorded a loss of $874.9 million, or $1.35 a share, compared with a profit of $237.7 million, or 36 cents, in the year-ago period.
Excluding impairment charges, Kroger would have earned 27 cents a share, well below analysts' forecast of 36 cents. These charges were primarily a result of a goodwill write-down at the company's Ralph's division in southern California, saying the stores in the state have been hurt by the economy.
Sales inched up to $17.67 billion from $17.62 billion last year, while same-store sales rose 1.3%.
Looking ahead, Kroger expects full-year earnings excluding impairment charges in the range of $1.60 to $1.70 a share, significantly lower than the $1.96 a share Wall Street expects. The grocer previously forecast full-year earnings of between $1.90 and $2 a share.
"While these revised forecasts are well below what we had expected to deliver for the year, we believe they appropriately reflect the challenges of the current operating environment," CEO David B. Dillon said in a statement. "In the near-term, our financial results are being pressured by factors including persistent deflation, unusually intense competition and the cautious mindset of customers."
This heightened competition comes as discounters like
are beefing up their offerings of food products.
Dillion added that he expects these pressures to continue through the first half of next year.
This dismal outlook is sending down shares of Kroger, as well as other grocers in the sector. Kroger is plunging 14.7% to $19.52,
is tanking 7.8% to $20.69 and
is tumbling 8.4% to $13.24.
-- Reported by Jeanine Poggi in New York.
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