Kroger Co (NYSE:KR) early Thursday [Mar 2, 2017 | 7:49am] posted market-beating fourth quarter earnings results, but its comparable sales came in worse than expected and its outlook for 2017 was tepid at best.

Written by StockNews.com

The Cincinnati-based grocery store operator reported Q4 earnings per share (EPS) of $0.53, which was $0.01 better than the Wall Street consensus estimate of $0.52.

Revenues rose 5.5% from last year to $27.61 billion, also topping analysts’ view for $27.31 billion.

Identical supermarket sales, excluding fuel, fell -0.7% in the latest period, however, missing the company’s guidance for ‘slightly positive’ comps. Same-store sales are considered a key indicator of a retailer’s health.

Kroger also noted that gross margins were 22.2% of sales for the fourth quarter, down 22 basis points from last year.

Looking ahead, KR, forecast full-year 2017 EPS of $2.21 to $2.25, which straddles Wall Street’s consensus estimate of $2.23. 2017 same-store sales are expected to be flat to up 1% for the year, which should prove challenging in the first while but show improvement in the latter part of 2017.

The company commented on its future plans for growth via press release:

“True to our history, we will continue making proactive investments in our Customer 1st Strategy to maintain our strong competitive position. We are lowering costs to invest those savings in our people, our business, and technology. This approach will enable us to deliver on our long-term net earnings per diluted share growth rate target of 8 – 11%, plus an increasing dividend, as it has in the past.”

Kroger Co shares fell $1.06 (-3.31%) to $31.00 in premarket trading Thursday. Year-to-date, KR had declined -6.77% prior to today’s report, versus a +7.27% rise in the benchmark S&P 500 index during the same period.

KR currently has a StockNews.com POWR Rating of C (Neutral), and is ranked #14 of 21 stocks in the Grocery/Big Box Retailers category.