Kroger Q2 Earnings Not Enough to Impress Investors

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Kroger Co. (NYSE: KR) released its most recent quarterly results before the markets opened on Friday. The grocer said that it had $0.39 in earnings per share (EPS) and $27.6 billion in revenue, compared with consensus estimates of $0.39 in EPS and revenue of $27.49 billion. The fiscal second-quarter of last year reportedly had EPS of $0.47 and $26.57 billion in revenue.

Total sales, excluding fuel, increased 3.8% in the second quarter compared to last year. At the same time, identical supermarket sales growth, without fuel, was 0.7%.

In terms of guidance, Kroger expects to see EPS in the range of $2.00 to $2.05. The company also expects to see identical sales growth, excluding fuel, of 0.5% to 1.0% for the remainder of the fiscal year.

The consensus estimates call for $1.98 in EPS and $121.7 billion in revenue for the fiscal year.

On the books, Kroger’s cash and cash equivalents totaled $819 million at the end of the quarter, up from $319 million in the same period from last year.

Rodney McMullen, CEO of Kroger, commented:

Through innovation, Kroger is redefining the food and grocery customer experience based on our core strengths. Our second quarter results demonstrate the progress we’ve made. We returned to positive identical supermarket sales growth in the second quarter. We had strong growth in both loyal and total households. Traffic is up, unit movement is up, market share is up, and our customers’ price perception is excellent and continues to improve. We have and always will put the customer first in all we do.

Shares of Kroger closed Thursday at $22.77, with a consensus analyst price target of $26.09 and a 52-week range of $20.46 to $36.44. Following the release, the stock was down over 7% at $21.17 in early trading indications.