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.