Kroger (KR) stock was little-changed early Friday after the company raised its full-year sales forecast, held its profit outlook steady, and posted results for its most recent quarter that were mixed as it navigates an increasingly competitive environment with Walmart (WMT) and Costco (COST) gaining share in grocery.
In its first quarter, the grocery giant reported adjusted earnings per share of $1.49, topping Wall Street forecasts for EPS to hit $1.45, according to Bloomberg data. Its same-store sales grew 3.2% in the quarter, besting forecasts for a 2.3% jump in what Kroger calls “identical sales.” Revenue tallied $45.12 billion, just missing forecasts for $45.23 billion.
“Our strong sales results and positive momentum give us confidence to raise our identical sales without fuel guidance,” CFO David Kennerley told investors in the release.
Full-year same-store sales, without fuel, are now expected to come in the range of 2.25%-3.25%. The company previously expected the range of 2%-3%. Wall Street expected the middle of the range at 2.47% prior to Friday’s results.
In the first quarter, which ended on May 24, the company said consumers remained cautious though, as they weighed the impact of Trump’s tariffs and higher costs, with Kennerly noting “the macroeconomic environment remains uncertain and as a result other elements of our guidance remain unchanged.”
Kroger reaffirmed the rest of its guidance, including adjusted earnings per share, which it still expects to be in the range of $4.60-$4.80.
This report comes with Kroger at a crossroads, with its former, CEO Rodney McMullen, resigning following an investigation from the Board in March while the search for a permanent successor continues. Chairman of Board, Ron Sargent, is currently serving as interim CEO.
Kennerley was named CFO back in April after former CFO Todd Foley shared his plan to retire.
In a note to clients, Joe Feldman of Telsey Advisory Group said “we understand there is the absence of a permanent CEO right now, but we believe the company is in good hands” with both executives.
CFRA analyst Arun Sundaram told Yahoo Finance in an interview, Kroger’s management team was also distracted over the last few years by its failed $24.6 billion merger with Albertsons, which was officially blocked by the Federal Trade Commission in December.
Feldman believes the company is “operating from a position of strength” as grocery remains “stable and defensive” in an “uncertain consumer spending environment that is largely impacted by changes in government policies, especially related to tariffs.
