The Kroger Co. (KR), headquartered in Cincinnati, Ohio, operates supermarkets, multi-department stores, and fulfillment centers. The company is valued at $39.1 billion by market cap and offers meat, seafood, bakery, dairy, frozen, cleaning, kitchen, beverages, health, electronics, toys, vegetables, fruits, beauty, and household products. The supermarket chain is expected to announce its fiscal second-quarter earnings for 2024 on Friday, Sep. 13.
Ahead of the event, analysts expect KR to report a profit of $0.91 per share on a diluted basis, down 5.2% from $0.96 per share in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates in its last four quarterly reports.
The company reported an adjusted EPS of $1.43 in the previous quarter, surpassing the consensus estimate by 7.5%. This success is attributed to KR's steadfast focus on its core strengths, which include offering a wide range of fresh products, providing personalized shopping experiences, and cultivating a seamless digital ecosystem.
For the full year, analysts expect KR to report EPS of $4.45, down 6.5% from $4.76 in fiscal 2024. However, its fiscal 2026 EPS is expected to grow 4% year over year to $4.63.
KR stock has outperformed the S&P 500’s ($SPX) 14.5% gains on a YTD basis, with shares up 18.6% during this period. Similarly, it outshined the S&P 500 Consumer Staples Sector SPDR’s (XLP) 9% gains over the same time frame.
KR’s overall performance can be attributed to its strong start to the year. It launched senior-focused primary care services in eight clinics in Atlanta, partnering with Better Health Group on the initiative. Meanwhile, the company became a new player in the fast-growing GLP-1 market, too. Its increased total households, loyal households, customer visits, and the expansion of new Kroger Precision Marketing advertising capabilities on Meta's platforms have also bolstered KR’s performance.
However, on Jun. 20, KR shares closed down more than 3% despite reporting strong Q1 results. The company’s revenue was $45.27 billion, topping Wall Street forecasts of $45.05 billion. Moreover, its digital sales grew more than 8%, with delivery and pickup combined for double-digit growth. However, investor sentiment was dampened by the company's full-year adjusted EPS forecast of $4.30 to $4.50, with the midpoint falling short of the consensus estimate of $4.43.
Analysts’ consensus opinion on KR stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 18 analysts covering the stock, 11 advise a “Strong Buy” rating, six give a “Hold” rating, and one recommends a “Strong Sell.” KR's average analyst price target is $58.68, indicating a potential upside of 8.3% from the current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
