Its shares plummeted more than 11 percent in early trading following the news.
Net income for the fourth quarter totaled $854 million, or 96 cents a share, compared with $506 million, or 53 cents a share, a year earlier.
Excluding one-time items, Kroger earned 63 cents a share, matching analysts' estimates based on a Thomson Reuters survey.
Revenue jumped 12.4 percent to $31 billion, slightly topping a forecast for $30.8 billion. The company reported sales of $27.6 billion during the year-earlier period.
Looking to fiscal 2018, Kroger is calling for earnings of $1.95 to $2.15 per share, largely below the $2.15 analysts were expecting.
"We've been saying for a while we expect to take a balanced approach" with respect to how Kroger will use any tailwinds from the corporate tax cuts, Chief Financial Officer Michael Schlotman told CNBC's "Squawk Box." About a third of any savings will go to shareholders, a third to workers and a third to customers, he said.
"Some analysts put way more into their initial investments for the fiscal year," Schlotman said. "I'm sure that's causing some consternation" and causing shares to fall.
Kroger also said Thursday it plans capital investments of roughly $3 billion in 2018, excluding mergers, acquisitions and buying back leased buildings.
CEO Rodney McMullen said he expects new U.S. tax legislation will allow the company to accelerate its turnaround plan announced last October. It consists of investments in employees, growing private-label brands and expanding "ClickList," where shoppers can pick up online orders in stores.
The U.S. grocery industry is under pressure from all sides, leaving Kroger in combat mode. Walmart and Whole Foods-owner Amazon are taking advantage of their size and scale with deep investments in technology, while European discount chains Aldi and Lidl continue to expand in the U.S. and in some cases force their peers to lower prices. Then there's competition from up-start online players such as Fresh Direct, which are reimagining the way groceries are delivered.
In recent weeks, Walmart and Amazon's push into grocery has picked up steam. Walmart is making a bigger investment in its meal-kit business and remodeling stores to support online orders. Amazon has been expanding Prime delivery via Whole Foods, which it's testing in a number of locations, including Kroger's Cincinnati headquarters.
According to J.P. Morgan analyst Ken Goldman, Kroger hasn't been as aggressive on pricing as Walmart "and most other competitors," based on recent store checks by the firm.
Kroger shares have fallen more than 15 percent since Amazon announced its acquisition of Whole Foods.
The grocer has reacted to some of this pressure by paring down its business to focus on its core. These efforts include the recently announced sale of its its convenience stores business to UK's EG Group for $2.15 billion. Kroger said it will use proceeds from this transaction, which is expected to close in the current quarter, to reduce debt and repurchase shares.
Kroger also has been making technology investments and has plans to roll out "Scan, Bag and Go," a platform that allows shoppers to bypass a traditional cashier in paying for items, to 400 locations by the end of this year.
— CNBC's Lauren Hirsch contributed to this reporting.