Kroger share price plummeted close to -20% underscoring the seismic changes in food grocery retailing. Technology shares continue to lose ground leading US indices lower on Thursday.
The Dow fell -14.66 points to 21,359.90, Nasdaq drops -29.39 points to 6,165.50 while S&P 500 shaves -0.22% at 2432.45.
So-called FAANG stocks continued the sell-off that began at the end of last week and carried on Monday and Tuesday. Shares recouped some losses before the Federal Reserve announcement but the sell-off returned today.
- Dow 21,359.90 -0.07%
- S&P 500 2432.45. -0.22%
- Nasdaq 6,165.50 -0.47%
- Russell 2000 1,410.08 -0.53%
- NYSE Composite 11,740.53 -0.33%
- Gold 1,255.90 +0.11%
- Oil WTI $46.89 -0.06%
Kroger, one of the largest food retailers, which operates 2,792 stores in the US slumped -18.89% to $24.56 after it cut its profit outlook.
The company produced its first quarter 2017 results with earnings of 58 cents per share beating analysts estimates. It trimmed its profits forecast from an estimate of $2.21 -$2.25 per share to $2.00 - $2.05 per share which is below analysts' expectations.
The grocery retailer is facing the same tough operating landscape, stiffer competition from other retailers moving sideways into food like Amazon and Walmart as well as price deflation and an intensified price war.
Competitors like Whole Foods (-6.74% to $33.06), Sprout Farmers Market (-9.38% to $22.42) and Supervalu (-7.39% to $3.76) were caught up in the investor sell-off.
In the first quarter the company's gross margins were down and operating costs up, however, Rodney McMullen, Chairman and CEO emphasised the laser focus it has on delivering customer value to counteract a more difficult trading environment.
Kroger said: "We are making meaningful investments in our digital and online growth. We believe that customers of the future will want to shop with us for anything, anytime, and anywhere. In the first quarter, we saw more than 30% growth in new digital customers and a more than 30% increase in digital visits – with faster growth in mobile – compared to last year."
A broad-based sell off in tech stocks continued with Yahoo -0.10%, Advanced Micro Devices slipped -2.29% and Apple -0.60%.
Nasdaq fell -2.47% over the last five days. In other news, Toy maker Mattel, dropped -6.68% to $20.67 as it announced it would cut its dividend by more than 50% to 15 cents per share down from 38 cents per share.
The company is looking to shift resources and reinvigorate sales as it faces a number of such as competition from tech-based games, falling demand for traditional toys and the loss of Hasbro's Disney deal are having a negative impact on the retailer's bottom line.
Finally, two gainers on NYSE were H&R Block, tax services company, surging +3.02% to $30.01 after beating earnings estimates.
Harley Davidson also spiked+2.91% to $54.89 on suggestions from Citi that sales were expected to go up "meaningfully".
Following Wednesday's Federal Reserve decision to increase interest rates the dollar strengthened surging 1.3% against the yen and 0.6% against the euro.
Sterling bucked the trend with the dollar slipping less than 0.1% against the pound and gold fell to a three-week low.