Kroger (KR) stock gains after topping Q1 earnings, revenue expectations

Kroger (NYSE: KR) shares climbed 2.92% premarket Thursday after the grocery chain reported first-quarter earnings and revenue that topped analyst expectations.

The company's adjusted earnings per share (EPS) came in at $1.43, exceeding the consensus estimate of $1.34. Revenue for the quarter was also a beat, coming in at $45.27 billion against the expected $44.93 billion.

Kroger's performance in the first quarter was marked by a modest 0.5% increase in identical sales, excluding fuel, and a total company sales increase of 0.6% compared to the same quarter last year, excluding fuel.

The company's operating profit stood at $1,294 million, with an adjusted FIFO operating profit of $1,499 million. Digital sales grew more than 8%, with delivery and pickup services experiencing double-digit growth, reflecting the company's successful execution of its go-to-market strategy.

Despite the challenging economic environment, Kroger's focus on providing value and personalized promotions resonated with customers, resulting in an increase in total households, loyal households, and customer visits.

The company's CEO commented on the strong results, attributing them to the long-term investments made in diversifying Kroger's business model, which has enabled them to manage economic cycles effectively.

Looking ahead, Kroger reaffirmed its full-year 2024 guidance, projecting identical sales without fuel to range between 0.25% and 1.75%. The company also expects an adjusted FIFO operating profit of $4.6 to $4.8 billion and adjusted EPS of $4.30 to $4.50, which is in line with the analyst consensus of $4.43.

Kroger's strong balance sheet and a net total debt to adjusted EBITDA ratio of 1.25, down from 1.34 a year ago, positions the company to pursue growth and enhance shareholder value.

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