Kroger Numbers Disappoint, Shares Drop

Kroger (NYSE: KR) on Thursday reported fourth-quarter earnings in-line with analysts' estimates, but issued a disappointing profit outlook for fiscal 2018.

Net income for the fourth quarter totaled $854 million, or 96 cents a share, compared to $506 million, or 53 cents a share, a year ago.

Excluding one-time items, Kroger earned 63 cents a share, matching analysts' estimates.

Revenue jumped 12.4% to $31 billion, slightly topping analysts' forecast for $30.8 billion. The company reported sales of $27.6 billion during the same period last year.

Looking to fiscal 2018, Kroger is calling for earnings of between $1.95 and $2.15 per share, largely below the $2.15 analysts were expecting.

CEO Rodney McMullen said Thursday he expects new U.S. tax legislation will allow the company to accelerate its turnaround plan. It consists of investments in employees, growing private-label brands and expanding "ClickList," where shoppers can pick up online orders in stores.

The U.S. grocery industry is under pressure from all sides, leaving Kroger in combat mode. Walmart (NYSE: WMT) and Whole Foods-owner Amazon (NASDAQ: AMZN) are taking advantage of their size and scale with deep investments in technology, while European discount chains Aldi and Lidl continue to expand their footprints and in some cases force their peers to lower prices.

Then there's competition from up-start online players such as Fresh Direct, which are re-imagining the way groceries are delivered.

Kroger shares tumbled $10.76 late Thursday morning, or 10.6%, to $23.44, within a 52-week trading range of $19.69 to $31.45.