Kroger Gears Up for Q3 Earnings Release Amidst Strong Stock Performance
Cincinnati, Ohio-based The Kroger Co. (KR) operates as a food and drug retailer. The company has a wide range of store formats, including combination food and drug stores, multi-department stores, marketplace stores, and price-impact warehouses. With a market cap of $41.4 billion, Kroger stands as one of the largest food retailers globally. Investors are looking forward to the Q3 earnings report scheduled for Thursday, Dec. 5.
Analysts Predict Steady Earnings Growth
Analysts expect Kroger to announce a profit of $0.98 per share, marking a 3.2% increase from the $0.95 per share reported in the same quarter last year. The company has a strong track record, having surpassed Wall Street’s earnings estimates for the past four quarters. Last quarter, Kroger’s adjusted earnings fell by 3.1% year-over-year to $0.93 but still exceeded expectations by 1.1%.
Future Projections Show Mixed Sentiments
Looking ahead to fiscal 2025, analysts anticipate an adjusted EPS of $4.46, a decrease of 6.3% from $4.76 in fiscal 2024. However, for fiscal 2026, the adjusted EPS is projected to see a rebound, growing 4% year-over-year to reach $4.64.
Kroger Stock Outperforms Market Peers
Kroger’s stock has performed well in 2024, surging 25.4%, which is above the S&P 500 Index’s ($SPX) gains of 21.8% and the Consumer Staples Select Sector SPDR Fund’s (XLP) returns of 12.9% year to date.
Latest Earnings Report Reveals Revenue Challenges
Although Kroger reported lower-than-expected revenue of $33.9 billion in its Q2 earnings released on Sep. 12, shares nevertheless increased by 7.2%. Net income experienced a significant recovery, climbing to $466 million compared to a net loss of $180 million in the same quarter the previous year. Last year’s loss was heavily impacted by a $1.4 billion opioid settlement charge. On an adjusted basis, however, EPS declined by 3.1% year-over-year and by 35% quarter-on-quarter to $0.93, indicating ongoing challenges in earnings.
Analysts Hold Optimistic Views on Kroger’s Future
The consensus rating for KR stock remains moderately bullish, classified as a “Moderate Buy.” Among the 18 analysts covering Kroger, 10 recommend a “Strong Buy,” while eight suggest a “Hold.” The average price target stands at $59.61, indicating a potential upside of just 3.9% from current levels.
More Stock Market News from Barchart
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
