Supermarket giant Kroger Co. (NYSE: KR) saw its shares fall nearly 10 percent after reporting disappointing sales results for the second quarter of its fiscal year. In recent months, the company has been taking aggressive steps to refresh its business and its efforts took a toll on same-store sales during the quarter. CEO Rodney McMullen said on an earnings conference call, “We expect the headwinds from space optimization during the first half of 2018 to become a tailwind late in the third quarter.”

Kroger reported quarterly sales for the latest period that were lower than analysts and investors expected. Sales at the retailer’s stores open for at least 12 months, excluding fuel, climbed just 1.6 percent during the quarter ended Aug. 18. That was less than the 1.9 percent growth Wall Street had anticipated.

Kroger’s net income rose to $508 million, or 62 cents per share, in the second quarter, up 43.9 percent from the $353 million, or 39 cents a share, reported one year ago. On an adjusted basis, Kroger earned 41 cents a share, higher than analysts’ estimates of 38 cents a share in earnings. Revenue was up 1 percent, rising to $27.87 billion from $27.60 billion a year ago. That was short of the $27.95 billion that analysts were expecting.

The company has reiterated its earnings guidance for the current fiscal year, calling for $2.00 to $2.15 per share on an adjusted basis. Analysts were expecting $2.12. Kroger shares fell more than 9 percent after the earnings announcement. Its shares have risen about 5 percent this year, giving the retailer a market cap of roughly $23 billion.

Competition in the grocery space has intensified in the US over the past several years, accelerating when e-commerce juggernaut Amazon acquired Whole Foods in 2017. To compete, Kroger has pumped a lot of money into new initiatives, including partnering with internet giant Alibaba to sell groceries in China and expanding its ClickList and online delivery options. Kroger owns its namesake chain along with the Fred Meyer, Ralphs and Roundy’s chains.