Pity supermarket giant Kroger (KR) . Even when you think all the bad news is out there, the food and drug store retailer finds ways to disappointingly surprise. On Thursday, Kroger trimmed its 2016 fiscal year earnings forecasts when it reported its third quarter results, though investors have chosen not to punish the stock in the day's trading.
Kroger, the nation's largest supermarket retailer with 2,700 locations, said it expected to report earnings of $2.10 to $2.15 for its 2016 fiscal year, effectively reducing the top end of its previous forecast, which had called for EPS of $2.10 to $2.20. Analysts have been looking for the company to come in at $2.13. The company's 2016 fiscal year ends Jan. 28, 2017.
The company did put up fiscal third quarter results that matched Wall Street's forecasts at 41 cents a share. Revenue of $26.56 billion for the period narrowly outpaced forecasts.
Kroger management said in a statement that it would give fiscal 2017 guidance in March. The company said it was standing by its long term ambitions to grow earnings between 8% and 11%, but acknowledged today that it expected its 2017 numbers to come up short of the low end of that projection.
Kroger, like a number of food purveyors, has been hit by the deflation in food prices that has persisted for most of the year, owing to a pullback in agricultural commodity and energy prices. The best-case scenario for the retail category is that the declines in food prices bottomed out in October, and that the extent of the pressure on food prices will narrow in coming quarters. However, there's little hope that food prices will actually begin to head higher anytime soon, which might mean that food retailers will be fighting this headwind for much of calendar 2017.