Kroger Stock Rises On Strong Q3 Earnings: Retail Sentiment Brightens
Retail sentiment on Stocktwits around Kroger improved to ‘extremely bullish’ despite a narrowed identical sales and EPS guidance for the full year.
FollowSupermarket chain Kroger Co's($KR) stock was up nearly 1% on Thursday afternoon after the company posted third-quarter earnings that beat analyst expectations on EPS, lifting retail sentiment.
Earnings per share came in at $0.98, above the consensus Wall Street estimates of $0.97.
Total company sales were $33.6 billion in the third quarter, compared to $34 billion for the same period last year. Analysts had estimated revenues to be at $34.19 billion.
The company said the decrease in sales was attributable to the sale of Kroger Specialty Pharmacy and lower fuel sales. Lower average retail prices per gallon of fuel were also responsible for the revenue shortfall.
Retail sentiment on the stock improved to 'extremely bullish' (75/100) from 'bullish' (63/100) a day ago despite a narrowed identical sales and EPS guidance for the full-year.
The company expects adjusted net earnings per diluted share to fall between $4.35 and $4.45 compared to $4.30 and $4.50 stated earlier. Its identical sales growth (without fuel) are expected to be between 1.20% to1.50% versus the earlier 0.75% to 1.75%.
"While we expect the macroeconomic environment to remain uncertain near-term, the strength of our model gives us confidence in our ability to deliver value for customers and invest in our associates, while generating attractive and sustainable returns for shareholders," Chairman and CEO Rodney McMullen said in a statement. "Kroger achieved strong sales results in the third quarter led by our pharmacy and digital performance, which reflects the strength and diversity of our model."
Earlier this week analyst firm Jefferies upgraded its rating to ‘Buy’ based on its belief its valuation would grow even if its pending merger with Albertsons Companies falls through as it has hit regulatory hurdles.
Stocktwits users gave mixed responses to their expectations from the pending merger with Albertson's.
"We are committed to closing this merger because bringing Kroger and Albertsons together will provide meaningful and measurable benefits – lower prices, secure jobs and expanded access to fresh, affordable food – for customers, associates, and communities across the country," McMullen added.
Kroger stock is up 31% year-to-date.
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