UPDATE 1-Kroger's 2020 profit, same-store sales estimates top expectations

(Reuters) – Kroger Co (KR.N) on Tuesday forecast next year’s profit and same-store sales ahead of analysts’ estimates, as the supermarket chain benefits from its efforts to modernize stores, enhance delivery and improve product assortments. In the face of growing competition in the U.S. grocery space, recently disrupted by online retail giant Amazon.com (AMZN.O), Cincinnati-based Kroger has been slashing prices and boosting investments in technology to attract more shoppers. Under its two-year-old “Restock Kroger” program, the company has also been focusing on private-label brand display, rearranging store layouts and expanding services such as home delivery and self checkouts. “Restock Kroger sets Kroger up for a stronger future… Momentum is returning to our core grocery business,” Chief Executive Officer Rodney McMullen said. The company forecast adjusted profit between $2.30 and $2.40 per share in 2020, and identical sales growth, excluding fuel, to be greater than 2.25%. Analysts are expecting the company to earn $2.30 per share in 2020 and report same-store sales growth of 1.99%, according to IBES data from Refinitiv. Shares of Kroger were up more than 2% before the bell. Kroger also said it expects capital investments, excluding mergers, acquisitions, and purchases of leased facilities, to rise between $3.2 billion and $3.4 billion next year. The company in September had raised doubts about its profit targets from its ongoing turnaround plan, spooking investors about the outcome of its plan. However, Kroger reconfirmed its 2019 forecast on identical sales and earnings.

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