Grocery giant raises same-store sales outlook while navigating leadership uncertainty and a tough retail landscape
Kroger (KR) stock jumped 9% in morning trading Friday after the grocery chain raised its full-year same-store sales forecast, even as it posted mixed quarterly results and faces mounting competitive and internal challenges.
For the fiscal first quarter ended May 24, Kroger reported adjusted earnings per share of $1.49, beating Wall Street estimates of $1.45, according to Bloomberg. Same-store sales excluding fuel rose 3.2%, topping forecasts for 2.3%. However, revenue came in just below expectations at $45.12 billion, missing the $45.23 billion target.
“We are pleased with our first quarter sales, which reflect strength in pharmacy, e-commerce, and fresh,” said CFO David Kennerley. As a result, Kroger raised its full-year identical sales growth forecast to a range of 2.25%–3.25%, up from 2%–3%.
Despite the positive sales momentum, the company held its full-year earnings forecast steady, expecting adjusted EPS between $4.60 and $4.80. Kennerley also cautioned that “the macroeconomic environment remains uncertain,” as consumers remain wary of rising costs and tariffs.
Kroger’s leadership is also in flux. Former CEO Rodney McMullen stepped down in March following a board-led investigation. Chairman Ron Sargent is currently serving as interim CEO, and while a search committee is active, there were “no specific updates” on a permanent replacement.
Analysts say Kroger has been distracted by its failed $24.6 billion merger with Albertsons, which was blocked by the FTC in December. The company has now resumed its portfolio review and plans to close about 60 stores over the next 18 months.
Still, Friday’s stock surge signals investor optimism that Kroger can refocus and stabilize amid tough competition from retail giants like Walmart and Costco.
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