Supermarket operator Kroger reported a surprise decline in holiday-quarter same-store sales on Thursday as competition in the grocery industry in the United States intensified.
Cincinnati, Ohio-based Kroger's shares, which have lost more than a fifth of their value in the past year, fell 3.3 percent to $31.00 in premarket trading.
The company said, excluding fuel, sales from stores open for at least a year fell 0.7 percent, widely missing analysts' average estimate of a 0.1 percent rise, according to Consensus Metrix.
The No. 1 U.S. supermarket chain said it expected full-year same-store sales excluding fuel to either remain flat or rise as much as 1 percent.
The company, whose chains include Ralphs and Fred Meyer, forecast full-year earnings of $2.21-$2.25 per share. The midpoint of this range meets analysts' average estimate of $2.23 per share.
Kroger said it expected the operating environment in the first half of this year to be similar to the second half of 2016, but that second-half 2017 results would likely improve.
Arguably, however, pricing competition in the industry is set to intensify this year, with Wal-Mart reportedly running a new price-comparison test to knock out competition from German discount grocery chain Aldi and Kroger.
Target, keen to stay relevant in the fray, said on Tuesday it would sacrifice full-year margins to keep its prices competitive. Kroger's shares had already fallen about 4 percent this week after news of Wal-Mart and Target's new pricing strategies.
Net income fell to $506 million, or 53 cents per share, in the fourth quarter ended Jan. 28, from $559 million, or 57 cents per share, a year earlier.
Analysts on average expected earnings of 52 cents per share.
Kroger said net sales rose 5.5 percent to $27.61 billion, beating analysts' average estimate of $27.31 billion, according to Thomson Reuters I/B/E/S.