Kroger earnings outlook disappoints, shares slide 10 percent

[March 07, 2019]   Reuters) - Kroger Co projected annual earnings below Wall Street forecasts on Thursday, as the supermarket chain spends heavily on new in-store technology and delivery services to better compete with Walmart and Amazon.

Its shares tumbled 10 percent in early trade after the company also reported fourth-quarter earnings below estimates.

The results come as Kroger ramps up investment in its grocery business by expanding delivery services and modifying its store layout.

As a result, online sales are rising - they jumped 58 percent in 2018.

Kroger is also investing in new technology and last year it installed tiny screens under shelves in hundreds of stores that display video ads, prices and nutritional information.

The company forecast full-year earnings between $2.15 and $2.25 per share. Analysts on average were expecting $2.26 per share, according to IBES data from Refinitv.

Overall investments this year should total $3 billion to $3.2 billion, Kroger said, compared with $3 billion last year.

The Cincinnati-based company said fourth-quarter net income fell to $259 million from $854 million a year earlier. Excluding one-time items, Kroger earned 48 cents per share, below analysts' estimates of 52 cents.

Revenue fell about 10 percent to $28.09 billion that came below estimates of $28.38 billion.

(Reporting by Nivedita Balu in Bengaluru; Editing by Sai Sachin Ravikumar)

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