On June 18, Kroger Co. (NYSE: KR) came out with its fiscal first-quarter earnings report. Kroger clocked in revenue of $33.05 billion and earnings per share (EPS) of $1.25, representing an expansion of 0.3% and 28%, respectively. Kroger saw same-stores sales expand a respectable 5.7%, excluding fuel.
Kroger disappointed Wall Street’s forecast on the revenue front, according to the Associated Press, which cited a survey by Zacks that indicated analysts’ expectations of $33.3 billion. However, Kroger’s EPS and same-store sales beat the Wall Street expectations game. Analysts expected an EPS of $1.21. Reuters cited a Consensus Metrix survey that had the same-store sales pegged at 4.4%.
Kroger upped its expected same-store sales to 3.5% to 4.5% from 3.0% to 4.0%. Kroger reaffirmed its EPS guidance range of $3.80 to $3.90, which lies along the analysts’ consensus estimate of $3.87 per share.
Kroger’s management gave a nod to the increasing role of technology and e-commerce in the consumer landscape. Kroger worked toward bringing in “technology and digital capabilities.” Kroger management discussed its integration with Vitacost.com and bringing customers into the “ClickList” program.
Giants, such as Amazon.com Inc. (NASDAQ: AMZN) and even Wal-Mart Stores Inc. (NYSE: WMT), are increasing their online presence. Amazon even goes to creative lengths in grocery consumption. For example, Amazon provides some of its consumers with a wand known as Amazon Dash, where people can scan barcodes to reorder groceries and personal household items in a warehouse fashion. Wal-Mart expanded its e-commerce workforce and infrastructure, according to the National Retail Federation’s website.
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Due to these chess moves from its competing retailing juggernauts, Kroger management emphasized to the investment community the importance of focusing on the consumer and moving forward. Kroger wants to make sure associates takes care of the people who pay the bills, the consumer, or else they will go somewhere else to shop, including their personal computers.
Thomson/First Call has the analysts’ consensus target price pegged at $80.83 per share, representing a 10% increase over the current stock price.
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