Kroger’s income dropped last quarter as the largest regional grocery provider continued investing in technology and third parties.
The grocer’s net earnings in quarter three dropped to $317 million or 39 cents per diluted share from $397 million or 44 cents per diluted share during the same period last year. Rising transportation costs, growth of the specialty pharmacy business and timing and size of investments contributed to the drop in gross margin.
But same store sales grew 1.6 percent and e-commerce sales saw a major 60 percent gain from third quarter 2017, beating analysts expectations.
“Kroger is transforming our business model. We’re moving from a traditional grocer to a growth company with both a strong customer ecosystem that offers anything, anytime, anywhere … Restock Kroger is the blueprint for this transformation,” said CEO Rodney McMullen.
The company was also able to cut prices and invest savings in technology, which is expected to continue drawing more traffic and accelerating growth, McMullen said.
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