Kroger Co. shares fell sharply Monday after the grocery store chain said financial results for the second half of the year would largely match the first and that store remodeling would hurt sales over the final months of 2018.

Kroger reaffirmed its full year guidance for adjusted earnings at range of $2.00 to $2.15 per share in an SEC filing Monday, largely in-line with current analysts’ forecasts and said it continues to expect expect “capital investments, excluding mergers, acquisitions, and purchases of leased facilities” to be within $3 billion across the whole of 2018. However, the group added that “a series of ambitious space optimization, store remodel, and technology enhancement projects” as part of its ‘Restock Kroger’ turnaround plan, which has affected around a thousand of its stores, would create “a headwind to sales for the remainder of the year.”

“We are on a transformation journey and we are making strong progress on redefining the customer experience,” said CEO Rodney McMullen. “Everything we are doing today is creating a truly seamless shopping experience, so we can serve customers anything, anytime and anywhere.”

“We are committed to delivering shareholder value through Restock Kroger. We have a clear path to generate $400 million in incremental FIFO operating profit by 2020 supported by solid early execution of Restock Kroger, including process changes that led to sustainable cost controls,” he added. “We look forward to outlining that path during our annual investors conference tomorrow.”

Kroger shares were marked 2.1% lower at the opening bell Monday and changing hands at $27.01 each, a move that takes the stock into negative territory for the year and values the Cincinnati, Ohio-based retailer at around $20 billion.

Source: The Street