Kroger Co. is expected to report a decline in earnings for the first quarter of fiscal 2024 on June 20. The consensus estimate for quarterly earnings is $1.33 per share, indicating an 11.9% decrease from the previous year. Despite this, Kroger has a history of surpassing earnings expectations, with an average surprise of 8.5% over the past four quarters.
The company is facing challenges in a competitive grocery industry with tightening consumer spending. Factors such as higher interest rates, reduced savings, and increased competition are putting pressure on Kroger’s results. For fiscal 2024, Kroger expects modest sales growth between 0.25% and 1.75%, excluding fuel. The company anticipates stronger sales as the year progresses, despite initial setbacks from SNAP reductions and inflation rates.
Kroger’s focus on customer segmentation, value, and ‘Our Brands’ portfolio has been successful. The company’s strategic initiatives like “Leading with Fresh” and “Accelerating with Digital” have driven growth, particularly in the digital business. Kroger’s supply chain optimization and inventory management have also contributed to high customer satisfaction levels.
Based on our model, we predict an earnings beat for Kroger this quarter, given its positive Earnings ESP and a Zacks Rank #3. Other companies worth considering with a favorable combination of elements for beating earnings include CarMax, Inc., General Mills, Inc., and Domino’s Pizza, Inc. These companies have the potential to outperform earnings expectations based on our analysis.
Overall, Kroger’s performance in the first quarter of fiscal 2024 will be closely watched, as the company navigates challenges in the grocery industry and focuses on driving sales growth through strategic initiatives. Stay tuned for the earnings report on June 20 to see how Kroger performs in a competitive market environment.
