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The Ratings Game: Kroger shares on track for worst day in a year after earnings fall short

Kroger Co. shares fell sharply Thursday, after the grocery store chain posted weaker-than-expected earnings for its fiscal fourth quarter as it invests in new online initiatives in an increasingly competitive market.

The stock KR, -4.45% was last down about 10%, putting it on track for its worst one-day percentage decline in a year.

“This print was far from perfect,” Guggenheim analysts wrote in a note. Gross margins, excluding fuel are still under pressure, 2019 same-store sales guidance is below forecasts even as the three-year transformation plan Restock Kroger matures, they wrote.

“That said, the selloff looks overdone, in our view, implying a ~6x multiple on our 2019 EBITDA estimate at $25,” said the note.

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