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Kroger (KR) Lined Up for Q2 Earnings: Factors Worth Noting
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The Kroger Co. (KR - Free Report) is likely to register a marginal decline in the top line when it reports second-quarter fiscal 2021 results on Sep 10, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $30,456 million, indicating a slight decline of 0.1% from the prior-year reported figure.
The bottom line of this operator of supermarket chain is expected to decrease year over year. We note that the Zacks Consensus Estimate for second-quarter earnings per share has been stable at 63 cents over the past 30 days. The figure suggests a decline from 73 cents a share reported in the year-ago period.
The company has a trailing four-quarter earnings surprise of 22.1%, on average. In the last reported quarter, this Cincinnati, OH-based company’s bottom line surpassed the Zacks Consensus Estimate by 20.2%.
Key Factors to Note
Kroger is likely to have faced tough year-over-year comparisons in sales, as COVID-19 benefits are lapped. Industry experts believe that lower at-home consumption activities and a drop in pantry-loading trends might have hurt the company’s second-quarter top-line performance.
Apart from this, stiff competition in the grocery segment remained a significant headwind. Again, costs related to additional employee payments and benefits, and investments undertaken to preserve safety and health of customers and team members amid the coronavirus crisis may have weighed on the to-be-reported quarter’s margins.
While aforementioned factors do raise concerns, we cannot ignore the efforts undertaken by Kroger to strengthen position not only with respect to products but also in terms of the way consumers prefer shopping. The company has been making significant investments to enhance product freshness and quality, and expand digital capabilities. Impressively, Kroger has been introducing new items under its “Our Brands” portfolio. The company has been expanding its Customer Fulfillment Center in an effort to ensure efficient deliveries. Cumulatively, these factors are likely to have favored the company’s second-quarter performance.
The company’s “Restock Kroger” program involving investments in omni-channel platform, identifying margin-rich alternative profit streams, merchandise optimization, and lowering of expenses have been gaining traction. Realizing the need of the hour, the company has been offering a no-contact delivery option, low-contact pickup service and ship-to-home orders.
Our proven model predicts an earnings beat for Kroger this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kroger has a Zacks Rank #2 and an Earnings ESP of +1.36%.
3 More Stocks With Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
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Kroger (KR) Lined Up for Q2 Earnings: Factors Worth Noting
The Kroger Co. (KR - Free Report) is likely to register a marginal decline in the top line when it reports second-quarter fiscal 2021 results on Sep 10, before the market opens. The Zacks Consensus Estimate for revenues is pegged at $30,456 million, indicating a slight decline of 0.1% from the prior-year reported figure.
The bottom line of this operator of supermarket chain is expected to decrease year over year. We note that the Zacks Consensus Estimate for second-quarter earnings per share has been stable at 63 cents over the past 30 days. The figure suggests a decline from 73 cents a share reported in the year-ago period.
The company has a trailing four-quarter earnings surprise of 22.1%, on average. In the last reported quarter, this Cincinnati, OH-based company’s bottom line surpassed the Zacks Consensus Estimate by 20.2%.
Key Factors to Note
Kroger is likely to have faced tough year-over-year comparisons in sales, as COVID-19 benefits are lapped. Industry experts believe that lower at-home consumption activities and a drop in pantry-loading trends might have hurt the company’s second-quarter top-line performance.
Apart from this, stiff competition in the grocery segment remained a significant headwind. Again, costs related to additional employee payments and benefits, and investments undertaken to preserve safety and health of customers and team members amid the coronavirus crisis may have weighed on the to-be-reported quarter’s margins.
While aforementioned factors do raise concerns, we cannot ignore the efforts undertaken by Kroger to strengthen position not only with respect to products but also in terms of the way consumers prefer shopping. The company has been making significant investments to enhance product freshness and quality, and expand digital capabilities. Impressively, Kroger has been introducing new items under its “Our Brands” portfolio. The company has been expanding its Customer Fulfillment Center in an effort to ensure efficient deliveries. Cumulatively, these factors are likely to have favored the company’s second-quarter performance.
The company’s “Restock Kroger” program involving investments in omni-channel platform, identifying margin-rich alternative profit streams, merchandise optimization, and lowering of expenses have been gaining traction. Realizing the need of the hour, the company has been offering a no-contact delivery option, low-contact pickup service and ship-to-home orders.
The Kroger Co. Price, Consensus and EPS Surprise
The Kroger Co. price-consensus-eps-surprise-chart | The Kroger Co. Quote
What Does the Zacks Model Unveil?
Our proven model predicts an earnings beat for Kroger this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Kroger has a Zacks Rank #2 and an Earnings ESP of +1.36%.
3 More Stocks With Favorable Combination
Here are three other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
lululemon athletica inc. (LULU - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Costco Wholesale Corporation (COST - Free Report) has an Earnings ESP of +0.58% and a Zacks Rank #2.
Dave & Buster's Entertainment, Inc. (PLAY - Free Report) has an Earnings ESP of +21.65% and a Zacks Rank #3.