Kroger has lowered its full-year forecasts after reporting weaker-than-expected results for its fiscal second quarter.
For the three months to 13 August, net profit fell by 11.5% to $383m, while sales were up just 4% to $26.6bn. Like-for-like sales (excl. fuel) were up 1.7% for the period, compared to the 5.3% growth it recorded in the same period last year.
The largest grocer in the US was hit by food price deflation, but CEO Rodney McMullen said Kroger would continue to offer promotions where it saw fit. However, he added: “We expect continued deflation and tough year-over-year comparisons for the remainder of the year, and even into the first quarter”.
Kroger now expects its full-year earnings to be in the range of $2.03-$2.13 per share, compared to its earlier forecast of $2.19-$2.28 a share. It also expects full-year sales to grow by 1.4%-1.8% on a like-for-like basis (excl. fuel), down from its forecast of 2.5%-3.5% growth.
Additionally, the grocer lowered its full-year estimate for capital investments by around $500m, to a range of $3.6bn-$3.9bn.