On Thursday, Kroger Co raised its yearly same-store sales and profit forecasts, citing strong demand for its pick-up and delivery services as well as continued home-cooking trends as reasons.
In premarket trade, shares of the Ohio-based supermarket climbed almost 6% after the company’s quarterly earnings above expectations.
Despite the reopening of restaurants and bars, Americans have continued to cook more at home, as they did during the lockdowns, boosting grocery store sales.
Customers are increasingly relying on delivery and pick-up services rather of going to shops, allowing Kroger to more than quadruple its digital sales from pre-pandemic levels in the quarter.
Kroger has increased its online presence, from reward programmes to limitless home delivery subscriptions, in order to attract new consumers and keep existing ones.
With the help of its relationship with British supermarket and technology business Ocado Group, the store has been establishing new fulfilment facilities around the United States to accommodate online purchases.
Kroger’s dependence on automation and robots has also helped the firm cut expenses at a time when retail margins are being battered by inflation, allowing the company to boost its adjusted gross margin rate by 3 basis points year over year.
According to IBES data from Refinitiv, the business anticipates adjusted same-store sales to climb 2 per cent to 3 per cent in fiscal year 2022, compared to analysts’ average forecast of a 2.1 per cent gain.
Kroger, which has almost 2,800 shops throughout the United States, said it expected adjusted profits per share of $3.75 to $3.85 this year, considerably above the $3.45 consensus expectation.
In the fourth quarter ended Jan. 29, same-store sales, excluding gasoline, increased 4 per cent, above projections of 2.84 per cent. Adjusted profit of 91 cents also exceeded expectations.
(Adapted from CNBC.com)