The Kroger Co. (KR) reported Q4 earnings and revenues that missed analysts’ expectations. Earnings for the quarter dropped 11% year-over-year to $0.48 per share and revenue decreased 9.5% to $28.1 billion. Analysts had expected the company to post earnings of $0.53 per share on revenue of $28.38 billion. Shares of the grocery firm plunged 10% in the pre-market trading hours.
On a GAAP basis, earnings decreased to $0.32 per share compared to $0.96 per share in the prior year quarter. Kroger’s identical sales growth, excluding fuel, stood at 1.9%, compared to 1.8% in the same period last year.
For 2019, the Cincinnati-based company predicts identical sales growth, excluding fuel, to range from 2.0% to 2.25%. EPS is estimated to be in the range of $2.15 to $2.25.
“We reached our FIFO operating profit goal and finished the year with sales and business momentum. We have a clear path to achieve $400 million in incremental FIFO operating profit growth and $6.5 billion in cumulative Restock cash flow by the end of 2020,” said CEO Rodney McMullen.
Kroger said that it achieved over $1 billion in costs savings through process investments during 2018 under the Restock Kroger Plan, which was announced by the company in October 2017.
Also read: Walmart (WMT) stock jumps on impressive Q4 earnings, eCommerce sales
Kroger is facing tough competition in the retail industry, particularly in the grocery space. To overcome this pressure, Kroger has been investing significantly to improve their online ordering and delivery options, especially for groceries, in order to provide better customer service and drive sales.
To improve customer experience, the company had introduced Kroger Pay and the Kroger REWARDS debit card and expanded nationwide retail roll-out of Home Chef meal kits in the fourth quarter. Kroger also partnered with with Microsoft (MSFT) to introduce connected store experience pilot and Retail as a Service commercial product.
Kroger stock had gained 3% since the beginning of this year and edged down 1% in the past three months period.