Shares of Kroger Co. fell sharply Thursday morning after the grocer's costly modernization plan dragged down profit during the fourth quarter.
The Cincinnati-based chain reported a profit of $259 million, or 48 cents per share, in the quarter. That's down from last year's fourth-quarter profit of $854 million. Per-share earnings were 4 cents short of Wall Street expectations, according to a survey by FactSet.
Kroger shares fell more than 12 percent in the worst day of trading this year.
In 2018, Kroger initiated a three-year plan to increase digital sales, redesign stores and invest in popular store brands.
Kroger invested $3 billion last year and expects to at least match that this year.
But sales dropped 9.5 percent in the final three months of the year, to $28.1 billion, which was also short of analyst projections.
The company operates about 2,800 stores in 35 states and the District of Columbia, serving almost 9 million people daily through two dozen different grocery chains.
Kroger is the biggest grocery player in the Indianapolis-area market, according to 2017 data from Chain Store Guide, with more than 50 stores and a market share approaching 40 percent, well ahead of Walmart's 24 percent share and Meijer's 12 percent share.
The company predicted a full-year profit in a range of $2.15 to $2.25 a share for 2019, below analysts’ average estimate of $2.28.