Kroger Co.’s revenue fell just short of Wall Street’s estimates in the grocer’s fiscal first quarter as a sales boom that began during the pandemic cooled off.
(Bloomberg) — Kroger Co.’s revenue fell just short of Wall Street’s estimates in the grocer’s fiscal first quarter as a sales boom that began during the pandemic cooled off.
Growth is fading as “more customers are feeling the effects of inflation and economic uncertainty,” Kroger said in a statement Thursday as it reported earnings. While the company managed to top analyst projections for adjusted earnings in the quarter, it only did so by the smallest margin since before the pandemic.
“There’s nothing wrong with the print, but investors have grown used to seeing more upside out of this company,” Adam Crisafulli, an analyst at Vital Knowledge, said in a note to clients.
The slowdown contrasts with the windfall the company reaped during the pandemic as shoppers rediscovered home cooking and fueled a surge in grocery demand. Buoyed by those gains, Kroger agreed last year to buy Albertsons Cos. in a deal valued at $24.6 billion. The transaction is currently undergoing a comprehensive antitrust review.
Kroger fell 3.3% ahead of regular trading in New York. The shares gained 5.9% this year through Wednesday, trailing the 14% advance of the S&P 500 index but topping the 1.1% decline in consumer-staples companies.
During the fiscal first quarter, which ended May 20, adjusted earnings rose to $1.51 a share, exceeding the $1.45 average of analyst estimates compiled by Bloomberg. Still, that was the narrowest beat since the quarter before the pandemic. Kroger maintained its annual profit forecast.
Sales climbed 1.3% to $45.2 billion, just shy of the $45.3 billion predicted by analysts.
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