Kroger trims sales target as shoppers pull back, sticks to profit forecast

Sept. 11 (Reuters) - U.S. grocer Kroger cut its annual identical sales forecast on Friday, citing slower consumer spending, but maintained its profit target as cost controls and higher-margin businesses helped cushion the impact.

The forecast cut echoes recent warnings from bigger rival Walmart and raises concerns about the health of the American consumer as they prioritize value amid economic uncertainty, even on everyday purchases such as groceries and household items.

Still, shares of the company reversed premarket losses to rise about 3% in morning trading as investors looked past the sales guidance and focused on Kroger's earnings beat and confidence in full-year profitability.

"A near flat headline comp (comparable sales figure) is further fuel to the 'Food Fight' fire, yet Kroger appears to be managing the choppy backdrop relatively well given the reiterated profit guide," Evercore ISI analyst Greg Melich said.