Earnings preview: What to watch when Kroger reports Q1 2019 results

The Kroger Co. (NYSE: KR) is scheduled to report first quarter 2019 earnings results on Thursday, June 20, before the opening bell. Analysts expect earnings to inch down slightly by 1.4% to $0.72 per share while revenues are estimated to drop 1.7% to $37 billion. Looking at the trailing four quarters, the company has missed earnings estimates only once.

Kroger’s top line results have declined in the past two quarters and its comparable sales trend is also slower compared to its peers. The company’s margins and profitability are also under pressure due to tough competition and higher costs. Kroger’s ongoing investments in technology and other business initiatives are likely to add to its expenses.

As the competition intensifies in the grocery space, Kroger continues to make efforts to improve its online order and delivery options. As part of these efforts, Kroger has entered into partnerships and made acquisitions and any updates on the progress made by these initiatives will be worth watching.

The company has been undertaking a transformation plan called Restock Kroger and updates on the progress made in this area is also something to keep an eye on.

In the fourth quarter of 2018, Kroger missed analysts’ expectations on revenue and earnings, which both saw year-over-year decreases. Sales fell nearly 10% to $28 billion while adjusted EPS dropped 11% to $0.48.

For 2019, the retailer has guided for identical sales growth, excluding fuel, to range from 2% to 2.25%. EPS is projected to be $2.15 to $2.25.

Kroger’s shares have fallen 11% thus far this year.

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