Kroger Falls as Outlook Signals Slowing of Pandemic-Era Boom
(Bloomberg) -- Kroger Co. shares fell as the company’s boosted full-year guidance suggests sales growth won’t maintain pandemic highs forever.
- The grocery chain said it expects identical-store sales to increase about 14% for the full year, a minor change to the previous forecast of “above 13%.” Kroger also sees full-year earnings per share, excluding some items, of $3.30 to $3.35, up slightly from an earlier forecast of between $3.20 and $3.30 a share. The modest guidance boost could give pause to investors expecting a bigger lift to the company’s prospects amid pandemic stockpiling.
- In the most recent quarter, same-store sales gained 10.9% when excluding fuel, just beating the estimate of 10.6% from Consensus Metrix. The Cincinnati-based company said sales growth was driven by Covid trends, although the growth was slower than in previous pandemic quarters.
- Investors want to know if Kroger can hold onto the market share it has picked up during the pandemic after a vaccine is widely available. Although Kroger said at-home cooking trends and a gain in market share don’t look likely to abate any time soon, maintaining the recent levels of demand once restaurants reopen will be a tough goal.
- Kroger shares fell 5.5% at 9:42 a.m. in New York. Through Wednesday, they’re up 11% in 2020, just shy of the S&P 500 index.
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