Kroger Exec: We Aren't Being Abandoned Because Amazon Now Owns Whole Foods
Shares of Kroger Co. (KR) - Get Report dropped more than 5.5% in early trading on Friday, Sept. 8, after the nation's largest grocery chain announced a 7.8% dip in profit for the second quarter driven by aggressive discounts to compete with supermarkets such as Walmart Stores Inc. (WMT) - Get Report and Amazon.com Inc.'s (AMZN) - Get Report newly acquired Whole Foods Market.
Kroger previously cut its yearly earnings forecast after Amazon announced it would acquire upscale Whole Foods in June. Shares of Kroger dipped nearly 25% since guidance was slashed, and executives confirmed the forecast in earnings released Friday.
Full-year adjusted earnings per share are expected to be fall in between $2 and $2.05. Kroger hasn't yet taken negative impact from Hurricanes Harvey and Irma into account, though.
Kroger's second-quarter earnings came in at 47 cents a share, beating the FactSet analyst consensus of 39 cents. Net income dropped nearly 8% to $353 million from $383 million in the same period last year, while comp sales increased 0.7%, ahead of the 0.4% prediction from FactSet analysts.
Kroger Chief Financial Officer Mike Schlotman said that although it appears as if some investors are jumping ship, "most importantly, our customers aren't abandoning us." The chain isn't planning on shuttering any of its nearly 2,800 stores across the country, Schlotman said in an appearance on Bloomberg Television, adding that most customers live within a mile and a half of a Kroger location.
Korger stock is down 34% so far this year.
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