Kroger trimmed its full-year identical-store sales growth outlook on Friday to less than 1%, excluding fuel, as the retailer continues to face headwinds across its business.

The Cincinnati-based company now expects full-year IDs excluding fuel to increase between 0.2% and 0.8%, down from previous guidance of 1% to 2% growth. The reduced outlook includes an estimated negative impact of 140 basis points from the Inflation Reduction Act, which is affecting pharmacy pricing.

Kroger's full-year profit outlook remains unchanged, with earnings per share projected at $5.10 to $5.30, as the company continues to drive cost savings and efficiencies amid ongoing sales pressures, it said in its second-quarter earnings call with analysts.

The company reported ID sales growth of 0.2%, excluding fuel, for the second quarter, below analysts' expectations. Total sales in the quarter, which ended Aug. 15, were $34.6 billion, versus $33.9 billion in the year-ago period. Excluding fuel, the sale of Vitacost and the exit of certain fulfillment centers, sales increased 0.1%, the company said.

"Sales were tracking well through the quarter until our final period, when we absorbed the impact of the cyclospora outbreak, which cost us roughly 35 basis points of total company IDs without fuel, reflecting the impact of produce categories," said Greg Foran, CEO.

The outbreak had a broad impact across the produce department, despite the recall being confined to leaf lettuce from Mexico, Foran said.

Consumer spending has also been pressured by high gasoline prices, he said, while lower drug prices in pharmacy reduced sales by about 140 basis points in the second quarter.

Some categories bucked the trend. Natural foods and prepared meals notched sales growth that was "well ahead of total sales," Foran said. Kroger added more than 600 new natural and organic items during the quarter. The company's premium private label, Private Selection, posted a 14% sales increase, bolstered by prepared meal offerings such as Mandarin Orange Chicken and Gnocchi Alla Sorrentina.

Ecommerce continues to be a bright spot. Adjusted ecommerce sales rose 20%, marking Kroger's second straight quarter of profitable ecommerce growth. Ecommerce customer counts also climbed 20%, driven by strong engagement during online deal days.

"Ecommerce is where most of the growth in our industry will come from over the next several years, and we intend to take our share of it," Foran said, citing a focus on fast delivery to meet increasing consumer demand.

Retail media revenues rose 24%, the company's best quarter in that business since 2021, he said.

For marketers tracking Kroger as a retail media channel, the 24% revenue surge and booming ecommerce engagement signal that the retailer's growth engines are shifting decisively toward digital, even as in-store sales stall.