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Kroger Stock Jumps on Upbeat Earnings, OutlookKroger Stock Jumps on Upbeat Earnings, OutlookRivas, Teresa.Barron's (Online); New York Kroger shares are popping in early trading after the supermarket operator delivered a beat-and-raise fourth quarter. Kroger (KR) said it earned 91 cents a share from revenue that climbed 7.5% year over year to $33.05 billion. Analysts were looking for EPS of 74 cents from revenue of $32.68 billion. For the year ahead, Kroger expects to earn between $3.75 and $3.85 a share, easily above the $3.43 per-share consensus estimate. Kroger closed higher on Wednesday and was up 5.7% to $52.20 on Thursday morning. The shares are up more than 9% this year, for a gain of 45% in the past 12 months. Kroger has delivered better-than-expected quarterly profits throughout the pandemic, as people ate more at home, a pattern that has lingered even as restrictions around the virus continue to lift. Identical sales excluding fuel were up 4% in the quarter, and up 14.6% compared with the prepandemic fourth-quarter of 2019. Digital sales more than doubled on a two-year basis. For the year ahead, management expects same-store sales will climb 2% to 3%. Kroger's rosy outlook likely calmed some fears among investors concerned that at-home food consumption could slip even as big-box retailers make inroads into the grocery space. Management also indicated that the company sees continuing business momentum for 2022. Still, some skepticism may persist, given inflation and the fading benefit of the pandemic. Data from Placer.ai showed that while Kroger finished the year relatively strongly in terms of foot traffic, visits declined on a two-year basis in January. The shares gained a bull as Telsey Advisory Group upgraded the stock ahead of the report, but Kroger remains fairly unpopular among analysts. Just 29% of the 28 tracked by FactSet rate it a Buy or the equivalent, and a quarter are bearish. |
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