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Kroger (KR) Mulls Over Merging With Albertsons Companies
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The Kroger Co. (KR - Free Report) is making stupendous efforts to strengthen its position in the industry. Per media reports, this mega grocery retailer is in discussion to unite with Albertsons Companies (ACI - Free Report) to form a new huge US grocery firm. After the merger, both companies can achieve higher scale and leverage on costs, competing better than the biggest grocery dealers.
Sources say that this can be a cash-and-stock transaction valuing Albertsons Companies at nearly $25 billion. However, no concluding decisions have come yet. According to sources, a possible deal might attract regulatory scrutiny, as food prices are soaring and causing significant inflation.
Kroger continues to deploy capital to concentrate more on remodels, merchandising and other viable projects to overcome competition in the grocery space. In this regard, Kroger’s subsidiary Home Chef (acquired in 2018) offers more than 500 products across various categories, including meal kits, heat-and-eat meals, ready-to-eat products and seasonal meals, among others. This apart, KR’s partnership with British online grocery delivery company Ocado reinforces its position in the online ordering, automated fulfillment and home delivery space.
We note that Albertsons Companies remains on track with its earlier announced review of strategic alternatives to enhance growth and maximize stockholder value. ACI’s focus on providing efficient in-store services, enhancing digital and omni-channel capabilities, and increasing productivity are steadily contributing to its upbeat performance.
What’s More?
Kroger has been making investments for a while to enhance product freshness and quality as well as expand its digital capabilities. Further, it is augmenting the “Our Brands” portfolio by launching products. KR’s digital business remains one of its key drivers, thanks to its Kroger Delivery Now, Boost membership program and the rollout of the customer fulfillment centers. Management remains committed to doubling KR’s digital sales by 2023.
KR’s ‘Kroger Delivery Now’ service in collaboration with Instacart provides customers with food and household staples at affordable prices in 30 minutes. It unveiled Kroger Floral in partnership with DoorDash. Besides, Kroger had earlier announced Kroger Drone Delivery pilot in partnership with Drone Express, reinforcing the importance of timely delivery to customers. Management continued to expand contactless payment solutions like Kroger Pay, Scan as well as Bag and Go. All these efforts are likely to boost sales and profitability.
This currently Zacks Rank #2 (Buy) player’s shares have increased 14.5% in the past year against the industry’s 9% decline.
The Zacks Consensus Estimate for Ulta Beauty’s fiscal 2022 sales suggests growth of 13.7% from the corresponding year-ago level. ULTA has a trailing four-quarter earnings surprise of 32.8%, on average.
Buckle, a leading retailer of apparel, footwear and accessories, has a Zacks Rank #2 (Buy) at present. BKE has a trailing four-quarter earnings surprise of 12.7%, on average.
The Zacks Consensus Estimate for Buckle’s fiscal 2022 sales and earnings per share suggests growth of 6.8% and 4.5%, respectively, from the year-ago corresponding figures.
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Kroger (KR) Mulls Over Merging With Albertsons Companies
The Kroger Co. (KR - Free Report) is making stupendous efforts to strengthen its position in the industry. Per media reports, this mega grocery retailer is in discussion to unite with Albertsons Companies (ACI - Free Report) to form a new huge US grocery firm. After the merger, both companies can achieve higher scale and leverage on costs, competing better than the biggest grocery dealers.
Sources say that this can be a cash-and-stock transaction valuing Albertsons Companies at nearly $25 billion. However, no concluding decisions have come yet. According to sources, a possible deal might attract regulatory scrutiny, as food prices are soaring and causing significant inflation.
Kroger continues to deploy capital to concentrate more on remodels, merchandising and other viable projects to overcome competition in the grocery space. In this regard, Kroger’s subsidiary Home Chef (acquired in 2018) offers more than 500 products across various categories, including meal kits, heat-and-eat meals, ready-to-eat products and seasonal meals, among others. This apart, KR’s partnership with British online grocery delivery company Ocado reinforces its position in the online ordering, automated fulfillment and home delivery space.
We note that Albertsons Companies remains on track with its earlier announced review of strategic alternatives to enhance growth and maximize stockholder value. ACI’s focus on providing efficient in-store services, enhancing digital and omni-channel capabilities, and increasing productivity are steadily contributing to its upbeat performance.
What’s More?
Kroger has been making investments for a while to enhance product freshness and quality as well as expand its digital capabilities. Further, it is augmenting the “Our Brands” portfolio by launching products. KR’s digital business remains one of its key drivers, thanks to its Kroger Delivery Now, Boost membership program and the rollout of the customer fulfillment centers. Management remains committed to doubling KR’s digital sales by 2023.
KR’s ‘Kroger Delivery Now’ service in collaboration with Instacart provides customers with food and household staples at affordable prices in 30 minutes. It unveiled Kroger Floral in partnership with DoorDash. Besides, Kroger had earlier announced Kroger Drone Delivery pilot in partnership with Drone Express, reinforcing the importance of timely delivery to customers. Management continued to expand contactless payment solutions like Kroger Pay, Scan as well as Bag and Go. All these efforts are likely to boost sales and profitability.
This currently Zacks Rank #2 (Buy) player’s shares have increased 14.5% in the past year against the industry’s 9% decline.
Here Are More Key Stocks for You
Some other top-ranked stocks are Ulta Beauty (ULTA - Free Report) and Buckle (BKE - Free Report) .
Ulta Beauty, the leading beauty retailer, presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Ulta Beauty’s fiscal 2022 sales suggests growth of 13.7% from the corresponding year-ago level. ULTA has a trailing four-quarter earnings surprise of 32.8%, on average.
Buckle, a leading retailer of apparel, footwear and accessories, has a Zacks Rank #2 (Buy) at present. BKE has a trailing four-quarter earnings surprise of 12.7%, on average.
The Zacks Consensus Estimate for Buckle’s fiscal 2022 sales and earnings per share suggests growth of 6.8% and 4.5%, respectively, from the year-ago corresponding figures.