Kroger Stock Gains After Beating Q1 Earnings, Revenue Estimates
Kroger shares jumped 2.92% premarket Thursday after the famous grocery chain reported strong first-quarter earnings and revenue that outperformed analyst expectations.
Strong Earnings Performance
Kroger's adjusted earnings per share (EPS) came in at $1.43, surpassing the consensus estimate of $1.34. This means for every share someone owns, Kroger made $1.43 in profit, which is more than what experts thought it would be.
Revenue Beats Expectations
Kroger's revenue for the quarter was also impressive, hitting $45.27 billion, against the expected $44.93 billion. Revenue is the total amount of money that Kroger made from selling groceries and other items.
Sales and Profit Increase
- Identical sales (excluding fuel) went up by 0.5%.
- The company's total sales (excluding fuel) also increased by 0.6% compared to the same quarter last year.
- Operating profit stood at $1,294 million.
- Adjusted FIFO operating profit was $1,499 million.
Digital Growth and Customer Engagement
Kroger saw more than an 8% increase in digital sales, with services like delivery and pickup showing double-digit growth. This means more people are shopping online at Kroger and using services to get their groceries delivered or picked up.
Kroger focused on providing value and personalized promotions, making shopping better for customers. This led to more people shopping at Kroger, including loyal customers and new visitors.
CEO's Remarks
Kroger's CEO praised the strong results, saying they were due to the long-term investments made in diversifying Kroger’s business model. This strategy helps Kroger manage through tough economic times effectively.
Future Outlook
Kroger reaffirmed its full-year 2024 guidance:
- Projecting identical sales without fuel to range between 0.25% and 1.75%.
- Expecting adjusted FIFO operating profit of $4.6 to $4.8 billion.
- Adjusted EPS anticipated to be $4.30 to $4.50, aligning with the analyst consensus of $4.43.
Financial Strength
Kroger’s net total debt to adjusted EBITDA ratio fell to 1.25 from 1.34 a year ago, showing a strong balance sheet. This strong financial position means Kroger can continue to grow and increase value for its shareholders.
Kroger’s impressive first-quarter performance shows the company's resilience and strong market strategy, paving the way for sustained growth and success.
