Shares of The Kroger Co. (KR, Financial) tumbled 10.51% to $25.45 in premarket trading on Thursday after missing earnings expectations for the fourth quarter of 2018 by 4 cents. The company posted earnings of 48 cents per share.
Revenue of $28.09 billion was down 9.5% year over year and missed expectations by $310 million.
The Cincinnati-based grocery store chain also released results for the full year.Â
Kroger recorded a 1.2% decrease in total sales to $121.2 billion, a gross margin of 21.7% of total sales and a 63.2% growth in earnings to $3.76 per diluted share.
Excluding fuel and various adjustments, total sales rose 2% while the gross margin fell 55 basis points. Operating, general and administrative costs as a percentage of total revenue jumped 14 basis points and the FIFO operating margin fell 68 basis points.
In addition, rent and depreciation fell one basis point in 2018 compared to 2017.
Looking ahead to 2019, Kroger expects earnings to be between $2.15 and $2.25 per share.
The stock was trading around $28.4 per share at close on Wednesday for a market capitalization of $22.7 billion. The stock gained 24% over the 52 weeks through March 6 and is now below the 200 and 100-day simple moving average lines and on par with the 50-day line. The closing price on Wednesday was 24.3% above the 52-week low of $22.85 and 15.3% below the 52-week high of $32.74.
Wall Street issued a hold recommendation rating for Kroger with an average target price of $30.54 per share.
In addition, the company is paying a quarterly dividend of 14 cents per share to shareholders. Based on Wednesday's closing price, the stock grants a forward dividend yield of 1.97% versus an industry median of 2.22%. Kroger has paid dividends since 1977.
Disclosure: I have no positions in any securities mentioned.
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