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1 Month : From Jun 2019 to Jul 2019
By Micah Maidenberg
Sales at Kroger Co. slipped in the company's latest quarter, as the supermarket chain races to transform its business amid heightened competition from a range of food retailers.
Kroger on Thursday reported $37.25 billion in revenue in its fiscal first quarter, down 1% compared with a year earlier but better than what analysts had forecast for the period, according to FactSet. The Cincinnati-based grocer has now reported year-over-year sales declines for the last three quarters.
The company attributed the most recent decline to the sale of its convenience-store business. Same-store sales, excluding fuel, rose but at a slower rate compared with last year.
Kroger, the biggest supermarket company in the U.S., is grappling with tumult in the grocery sector, as e-commerce changes how consumers shop for food, making online-ordering and delivery more common.
Discount-chains have expanded. Meanwhile, Amazon.com Inc. is working to bring customers into its Whole Foods Market unit and plans to launch a separate grocery brand, The Wall Street Journal has reported.
Kroger has been investing in its e-commerce operation and said on Thursday that delivery or online-order-and-pickup at stores are now available at 93% of its locations. Digital sales grew 42% in the quarter that ended May 25.
But that spending has costs. Gross margins fell in the quarter, primarily due to lower margins in its pharmacy business, according to the company.
Overall, Kroger reported a profit of $772 million, or 95 cents a share, compared with $2.03 billion, or $2.37 a share, a year earlier. After adjustments, Kroger reported a profit of 72 cents a share for the most recent period, beating Wall Street targets by a penny.
Shares dropped about 2% in premarket trading. Kroger's stock has fallen 14% so far this year, through Wednesday.
Kroger has been slimming down its operation and hunting for investment opportunities. In April, it sold a company that makes ice cream, ice teas and other products. Kroger said in May it formed a new venture focused on investments in consumer products with an investment firm.
Write to Micah Maidenberg at email@example.com
(END) Dow Jones Newswires
June 20, 2019 09:29 ET (13:29 GMT)
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