Kroger Co. (KR) is not immune to the tough economic environment. The intensifying price war among grocery stores to lure budget-constrained consumers has compelled Kroger to cut prices, hurting its sales and margins.
The company reported lower-than-expected third-quarter 2009 results. The quarterly earnings of 27 cents per share missed the Zacks Consensus Estimate of 36 cents, and fell 25% year-on-year. Consequently, Kroger trimmed its full-year 2009 earnings forecast.
The company’s conservative outlook underlines the raging competition. Kroger’s debt-to-capitalization ratio is also substantially higher, which could adversely affect its credit worthiness making it more susceptible to the economic downturn and competitive pressures.Zacks Investment Research
