What to Expect When Kroger Reports Thursday Morning

Kroger Co. (NYSE: KR) is scheduled to release its fiscal fourth-quarter financial results before the markets open on Thursday. The consensus analyst forecast calls for $0.52 in earnings per share (EPS) and $28.38 billion in revenue. The same period of last year reportedly had $0.63 in EPS and $31.03 billion in revenue.

This is the second largest U.S. food supermarket retailer and generates $120 billion in annual sales. Kroger operates roughly 2,800 supermarkets throughout 35 states and under two dozen banners. Kroger also sells fuel at 1,450 supermarket fuel centers and operates 2,268 pharmacies and 274 jewelry stores.

The stock remains very cheap, as the market cap is just under $23 billion. The company posted solid fiscal third-quarter results, with operating profits coming in $100 million above Wall Street forecasts. Unexpected expense leverage on cost controls and alternative profit streams more than offset a lower gross margin due to price investments.

In the most recent quarter, Kroger reported identical sales growth, without fuel, of 1.6%. Excluding fuel, the convenience store business unit divestiture and the merger with Home Chef, total sales increased 1.7% in the third quarter of 2018 over the same period of last year. The company also reported digital sales growth over 60%.

Excluding Wednesday’s move, Kroger had underperformed the broad markets, with its stock up only 5% year to date. In the past 52 weeks, the stock was up closer to 6%.

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

  • Buckingham Research has an Underperform rating.
  • Loop Capital has a Hold rating and a $30 price target.
  • Stephens has a Hold rating with a $30 price target.
  • Credit Suisse has an Outperform rating and a $33 target.

Shares of Kroger were traded down 1% at $28.58 on Wednesday, in a 52-week range of $22.85 to $32.74. The consensus price target is $30.57.