Kroger Co. (KR) posted stronger-than-expected first quarter earnings Thursday, and boosted its full-year profit forecast, as customers shifted focus to food and staples purchases amid the fastest domestic inflation in more than four decades.
Kroger said adjusted earnings for the three months ending on May 21 came in at $ 1.45 per share, up 21.8% from the same period last year and well ahead of the Street consensus forecast of $1.30 per share. Group sales, Kroger said, were up 11% to $44.6 billion and again topped analysts' consensus forecast of $44.24 billion tally.
Data from the Commerce Department yesterday showed the overall retail sales fell 0.3% in May, thanks in part to a surge in U.S. gasoline prices that diverted discretionary spending. Grocery store sales, however, are up 8.5% so far this year, and rose 4.6% on the month.
Looking into the 2023 fiscal year, which ends next February, Kroger said it sees full year earnings in the range of $3.85 to $3.95 per share, a 10 cent improvement from the lower end of its prior guidance.
The midpoint of group's same-store sales guidance, however, fell modestly shy of the Refinitiv forecast of 3.2%, with the chain estimating an increase of between 2% and 3.5%.k
"Kroger achieved strong first quarter results as we successfully executed on our strategy of Leading with Fresh and Accelerating with Digital," said CEO Rodney McMullen. "We are incredibly proud of our associates who continue to put the customer at the center of everything we do."
"Our team is doing an outstanding job managing costs in an inflationary environment, which is allowing us to continue to invest in our associates while providing our customers the freshest food at affordable prices when and where they need it," he added. "Looking ahead, we are well positioned to continue delivering for our customers, investing in our associates, and driving sustainable returns for shareholders."
Kroger shares were marked 4% lower in early Thursday trading immediately following the earnings release to change hands at $48.73 each, a move that would trim the stock's year-to-date gain to around 8.1%.
