Kroger has also expanded its assortment with the launch of
Simple Truth Plant-Based food products. The acquisitions of Ocado, Home Chef,
and Nuro will also help in improving the company’s capabilities and driving
growth. However, higher costs are likely to weigh on margins in the
to-be-reported quarter.
In the first quarter of 2019, Kroger missed revenue estimates while earnings matched expectations. Sales dipped 1.2% to $37.2 billion while adjusted EPS declined 1.4% to $0.72. The topline numbers were impacted by the sale of Kroger’s convenience store business unit. Identical sales, excluding fuel, increased 1.5%.
Also see: Kroger Q1 2019 Earnings Conference Call Transcript
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For fiscal 2019, Kroger expects GAAP EPS to be $2.38
to $2.48 and adjusted EPS to be $2.15 to $2.25. Identical sales growth,
excluding fuel, is predicted to be in the range of 2% to 2.25%. Kroger’s financial strategy is to use its free cash
flow to drive growth while maintaining its current investment grade debt rating
and returning capital to shareholders.
Kroger’s shares have gained 4% in the past three months and 7% in the past one month. The stock was up 1.5% during afternoon hours on Monday.