Kroger doubtful about turnaround targets, shares fall

Kroger doubtful about turnaround targets, shares fall

FILE PHOTO: The Kroger supermarket chain’s headquarters is shown in Cincinnati, Ohio, U.S., June 28, 2018. REUTERS/Lisa Baertlein/File Photo GLOBAL BUSINESS WEEK AHEAD

(Reuters) – Supermarket chain operator Kroger Co (KR.N) on Thursday raised doubts about its profit targets from an ongoing turnaround plan, sending its shares down as much as 6%.

The retailer is rapidly growing its online business by expanding delivery options under the three-year plan, while also modifying store layout and adding more of its own brands on shelves.

“We are not reconfirming the 3-year $400 million in incremental operating profit expectation,” Chief Executive Officer Rodney McMullen told analysts. “We want to be transparent about what went according to plan and what didn’t go as anticipated.”

“Some things are coming to fruition as we expected, but just later than we thought, such as identical sales momentum,” he said.

Kroger’s shares were initially trading higher after the company reported second-quarter same-store sales and profit above expectations.

The company said it would give more details on its financial goals for the turnaround program, called Restock Kroger, and its forecast for 2020 during its investor day in November.

Reporting by Nivedita Balu in Bengaluru; Editing by Arun Koyyur and Saumyadeb Chakrabarty

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