Kroger’s stocks dropped more than 10 percent today, following an earnings report that didn’t reach Wall Street’s expectations. But the Cincinnati company’s digital sales show company growth in the face of intense competition in the evolving online grocery industry.
The largest regional grocery provider, which has been heavily investing in ecommerce to keep up with Amazon’s purchase of Whole Foods Market last summer, reported net earnings of $508 million, or 62 cents per share, for the second quarter of 2018, up from $353 million in 2017, according to a statement.
Excluding one-time items, Kroger earned 41 cents, 3 cents more than analysts’ 38-cent predictions.
With huge pushes into Kroger Ship, Instacart, ClickList and Simple Truth sales in China this year, the grocer’s online presence is growing rapidly, showing a digital sales increase of 50 percent.
“We feel good about our net earnings per diluted share and ID sales results in the second quarter. We expect our investments in space optimization during the first half of 2018 to become a tailwind late in the third quarter,” said Kroger chairman and CEO Rodney McMullen.
But the sales didn’t reach Wall Street’s expectations, increasing 1 percent to $27.9 billion overall and up 1.6 percent in comparable stores.
»BIZ BEAT: White Castle introduces plant-based burger
“We are only two quarters into our three year Restock Kroger plan, and we are making solid progress,” McMullen said.
This is the opposite reaction Wall Street had to Kroger’s first quarter report, when shares surged 11 percent following a profit of $2.03 billion, mainly on the sale of its convenience store unit.
Kroger employs 8,100 associates in the Dayton region with 44 supermarkets, 12 locations with ClickList services and another 10 locations with Starbucks services.
FIVE FAST READS
Thank you for reading the Dayton Daily News and for supporting local journalism. Subscribers: log in for access to your daily ePaper and premium newsletters.
Thank you for supporting in-depth local journalism with your subscription to the Dayton Daily News. Get more news when you want it with email newsletters just for subscribers. Sign up here.