The headquarters of the Kroger supermarket chain is in Cincinnati, Ohio.
Lisa Baertlein | Reuters
Kroger It raised its forecast for the year on Thursday after stronger third-quarter sales beat Wall Street expectations and inflation continued to drive up the prices buyers pay for milk, eggs and milk. other groceries.
The shares rose about 3% in premarket trading.
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Kroger CEO Rodney McMullen said the company attracts buyers by delivering value. In a press release, it said it “resonates with shoppers and builds more customer loyalty” with its private label grocery brands, affordable fresh foods, data-driven promotions and customer rewards program. fuel.
Here’s what Kroger reported for the three months ended Nov. 5, compared to Refinitiv consensus estimates:
- Earnings per share: 88 cents adjusted vs. 82 cents expected
- Revenue: $34.2 billion vs $33.96 billion expected
Groceries have been a strong driver of retail sales, with inflation nearing four-decade highs. While some shoppers are skipping big-ticket items or pulling out discretionary purchases, retailers selling food and necessities have attracted a more steady stream of customers.
walmart, the nation’s largest grocer by revenue, also raised its outlook for the full year after reporting a strong third quarter. The big-box retailer said its low-cost groceries are attracting more customers, including a growing number of families with annual household incomes of more than $100,000 a year.
At Kroger, like-for-like sales rose 6.9%, excluding fuel, in the third quarter. The industry-specific measure includes sales at supermarkets that have been operating continuously for at least 15 months. That exceeded growth expectations of 4%, according to FactSet.
The operator of Ralphs, Fred Meyer and other supermarket chains now expects the metric to climb 5.1% to 5.3% for the year. It previously forecast growth of 4% to 4.5%.
Net income in the third quarter fell to $398 million, or 55 cents per share, from $483 million, or 64 cents per share a year earlier.
For the full year, Kroger now expects adjusted net income to be between $4.05 and $4.15. He had previously forecast between $3.95 and $4.05.
Kroger announced in October its intention to buy its competitor, Albertson, in a deal valued at $24.6 billion. The acquisition, if approved, would combine the nation’s second- and fourth-largest grocers by revenue, according to data from market researcher Numerator.
Kroger faced pushback from elected officials and even its own employees, who said it would hurt competition. Earlier this week, McMullen testified before senators who oppose the merger at a congressional hearing. He argued that the combined company would lower food prices and improve the customer experience as Kroger competes with grocery giant Walmart and new industry players like Amazon.
As of Wednesday’s close, Kroger shares are up about 9% so far this year. Shares closed Wednesday at $49.19, down less than 1%. Its market value is $35.21 billion.
This story is developing. Please check for updates.
