Kroger raises revenue outlook after Q2 earnings beat

Kroger Co (NYSE:KR, XETRA:KOG) raised its full-year revenue outlook after posting second-quarter earnings that beat Wall Street estimates, at the same time as the grocery store trimmed its gross sales progress forecast.

The firm reported adjusted earnings per share of $1.09 for the quarter, forward of analyst estimates of $1.06 and up 5% from a 12 months earlier. Revenue got here in at $34.6 billion, roughly according to estimates of $34.58 billion and up 2% year-over-year.

Adjusted FIFO working revenue reached $1.08 billion, topping estimates of $1.01 billion, although the determine was down 1% from the prior 12 months.

Kroger minimize its full-year steerage for similar gross sales excluding gas, now anticipating progress of 0.2% to 0.8%, down from a previous vary of 1.0% to 2.0%. Identical gross sales excluding gas grew 0.2% within the quarter.

The firm affirmed the remainder of its full-year steerage, together with adjusted earnings per share of $5.10 to $5.30, free money circulation of $2.7 billion to $2.9 billion, and capital expenditures of $3.8 billion to $4.0 billion. It additionally raised its outlook for adjusted FIFO working revenue to $5.0 billion to $5.2 billion, above estimates of $4.84 billion. The firm expects a tax price of 23%.

Gross margin for the quarter was 22.4%, down 10 foundation factors from a 12 months earlier. Adjusted eCommerce gross sales grew 20% year-over-year, whereas revenue from Kroger Precision Marketing, the corporate’s retail media trade, rose 24%.

CEO Greg Foran stated he was “happy with the progress” the corporate is making.

“Our groups stored driving worth for patrons, bettering execution in our shops, rising eCommerce profitably and managing prices with self-discipline,” Foran stated in a press release.

“Improving gross sales momentum stays a prime precedence. While there’s extra work to do, I’m assured in our plan to grow to be America’s favourite grocer.”

Shares of Kroger have been up round 4% on Friday morning.