(Reuters) -Kroger on Thursday forecast annual same-store sales largely above Wall Street estimates, fueled by steady grocery demand as value-conscious shoppers prioritize staples such as fresh fruits and vegetables.
The results follow an abrupt ouster of long-time chief Rodney McMullen earlier this week, after a board investigation found that his personal conduct was “inconsistent” with certain company policies. The board has appointed lead director Ronald Sargent as interim CEO.
McMullen had been in the top role for over a decade. Under him the supermarket chain was capitalizing on strong e-commerce demand, by offering customers convenient curbside pick up and faster order delivery.
This helped the company better compete with big-box retailers Walmart, Target and Amazon.com. Kroger reported an 11% jump in fourth-quarter digital sales.
It also expanded its private brand offerings in 2024, introducing more than 900 new items under its Our Brand label, including 370 fresh items, in a bid to get lower-income shoppers back into the store.
The company posted a 2.4% rise in fourth-quarter identical sales, excluding fuel, compared with analysts’ average estimate of a 1.96% rise, according to data compiled by LSEG.
The result comes amid a generally cautious stance taken by major retailers on their annual forecast, which had so far been enjoying a steady stream of customers queueing up for cheaper household products.
Kroger, however, forecast growth in full-year identical sales, excluding fuel, in the range of 2% to 3%, compared with analysts’ average estimate of a 1.96% rise.
It also projected 2025 adjusted earnings of $4.60 to $4.80 per share, compared with estimates of $4.79.
Shares of the company, which rose 34% last year, were down 1% before the bell as Kroger’s annual profit forecast was softer than anticipated by analysts.
(Reporting by Savyata Mishra in Bengaluru; Editing by Shinjini Ganguli)
Comments