Revenue
Earnings
The consensus estimate for EPS in Q2 2023 is $0.91, which compares to EPS of $0.90 reported in the prior-year quarter. In Q1 2023, adjusted EPS grew 4% YoY to $1.51.
Points to note
Last quarter, Kroger faced a challenging environment as customers dealt with inflation, fewer SNAP dollars and macroeconomic uncertainty. As customers prioritized their spending on food and looked for ways to save as much as they could, they made use of the company’s loyalty discounts, personalized digital coupons and fuel rewards while also engaging in its Fresh for Everyone and Our Brands products. This led to a rise in customer trips and household growth.
In Q1, Kroger saw a rise in higher-income customer households as they migrated from specialty retailers. These customers were more profitable as they bought more Fresh items, premium Our Brands lines and larger pack sizes. Budget-conscious customers, on the other hand, bought fewer items, lower-priced products and smaller pack sizes.
Kroger’s value proposition is likely to prove beneficial in the second quarter. It is also likely to see gains from its Fresh for Everyone offerings and Our Brands products. The company’s efforts to improve its digital capabilities as well as its pickup and delivery services are also likely to help drive growth.