What to Expect From Kroger Earnings

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Kroger Co. (NYSE: KR) is scheduled to release its fiscal second-quarter earnings report before the markets open on Friday. Consensus estimates from Thomson Reuters are calling for $0.45 in earnings per share (EPS) on revenue of $26.79 billion. The same period from last year reportedly had $0.44 in EPS and $25.54 billion in revenue.

This company is both defensive and necessary, as it does most of its business in the United States and is seemingly hedged against foreign markets. You can buy food of all sorts, cheap or expensive — even getting some of the exact same products that Whole Foods sells at a handy discount. On top of Kroger stores, it has stores under name Ralphs, Fred Meyer and King Soopers, and it has its own branded foods.

Despite a weak performance through the first half of the year, management said that Kroger started out the year with a solid first quarter, during which it continued to strengthen its connection with customers and expanded ClickList offerings to more customers in more markets.

With this quarter, Kroger is looking to extend its streak of same store sales growth. So far the company has posted fifty consecutive quarters of positive identical supermarket sales growth, excluding fuel. However a weak summer might call this into question, but on the other hand same store sales momentum is on the company’s side.

A few analysts weighed in on Kroger ahead of the earnings report:

  • RBC Capital Markets reiterated a Sector Perform rating with a $37 price target.
  • Jefferies has a Hold rating with a $37 price target.
  • Citigroup has a Buy rating with a $43 price target.
  • Oppenheimer has an Outperform rating with a $40 price target.
  • Cleveland Research downgraded to a Hold rating from Buy.
  • Wells Fargo reiterated an Outperform rating.
  • BMO Capital Markets has a Market Perform rating with a $35 price target.
  • Wolfe Research has an Underperform rating.
  • Credit Suisse reiterated a Hold rating with a $34 price target.
  • Goldman Sachs has a Buy rating with a $42 price target.

Excluding the move on Thursday, Kroger has underperformed the broad markets with the stock down 24% year to date. Over the past 52 weeks, the stock is down about 9.5%.

Shares of Kroger were trading around $30.75 on Thursday, with a consensus analyst price target of $39.19 and a 52-week trading range of $30.70 to $42.75.

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