Dow, S&P 500, Nasdaq waver as Wall Street cements in rate-cut hopes

Kroger (KR) stock fell about 3% in premarket trading after the food retailer reported little revenue growth year over year.

The Cincinnati-based grocery chain posted adjusted earnings per share of $1.05, slightly beating Wall Street analysts’ expectations of $1.03 earnings per share, according to S&P Global Market Intelligence.

However, third quarter revenue of $33.9 billion was roughly unchanged from the same period a year ago, $33.6 billion, and missed analyst estimates of $34.1 billion. Same-store sales, excluding fuel, grew 2.6% year over year.

Kroger expects same-store sales ex-fuel to grow 2.8%-3.0%, narrower than its previous range of 2.7%-3.4%. The company also raised the lower end of its EPS guidance to $4.75-$4.80 from $4.70-$4.80 previously.

In a Nov. 25 note, JPMorgan analysts noted that the consumer and competitive environment has grown notably tougher for food retailers.

“Sentiment toward food retailers seems to have soured a bit over the past few months, including for [Kroger],” the analysts wrote. “When inflationary concerns were more persistent in the food space and the consumer environment was stronger, the food retail space was better liked.”

The analysts noted a few factors putting pressure on Kroger shares, in particular, in recent months: Amazon’s (AMZN) push into grocery, Walmart (WMT) taking share in grocery and ramping up price competition, concerns about food inflation reigniting, and Nielsen data showing slower sales growth.

Read more live coverage of corporate earnings here.