What to Expect From Kroger Earnings

Retail

Published: September 10, 2015 1:10 pm

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Kroger Co. (NYSE: KR) is scheduled to report its fiscal second-quarter financial results before the markets open Friday. The consensus estimates from Thomson Reuters call for $0.39 in earnings per share (EPS) on $25.51 billion in revenue. In the same period of the previous year, the retailer posted EPS of $0.35 and $25.31 billion in revenue.

The company disappointed Wall Street’s forecast on the revenue front for the first quarter. However, Kroger’s EPS and same-store sales beat the expectations game. At that time, Kroger’s management gave a nod to the increasing role of technology and e-commerce in the consumer landscape. The company worked toward bringing in technology and digital capabilities. We can look for more of this in the second quarter.

Kroger raised its expected same-store sales to a range of 3.5% to 4.5% from the prior 3.0% to 4.0%. Kroger reaffirmed its EPS guidance range of $3.80 to $3.90, which aligns with the analysts’ consensus estimate of $3.87 per share.

Moves from Amazon and Wal-Mart to increase their online presence have prompted Kroger management to emphasize to the investment community the importance of focusing on the consumer and moving forward. Kroger wants to make sure associates take care of the people who pay the bills, the consumer, or else they will go somewhere else to shop, including their personal computers.

A few analysts recently weighed in on Kroger ahead of its earnings:

Pivotal Research initiated coverage with a Buy rating and a $43 price target.
Barclays has an Equal Weight rating and a $38 price target.
Guggenheim reiterated a Buy rating with a $41 price target.

So far in 2015, Kroger shares have outperformed the market, with shares up 8% year to date and up about 36% in the past 52 weeks.

Shares of Kroger were up 2% at $35.09 Thursday afternoon. The stock has a consensus analyst price target of $40.67 and a 52-week trading range of $25.42 to $39.43.

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