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The Kroger Co. (KR) Queues for Q1 Earnings: Is a Beat Likely?
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The Kroger Co. (KR - Free Report) is likely to register a bottom-line decline when it reports first-quarter fiscal 2024 earnings on Jun 20. The consensus mark for quarterly earnings has remained unchanged in the past 30 days at $1.33 per share. This indicates a decline of 11.9% from the year-ago quarter’s reported figure. However, KR has a trailing four-quarter earnings surprise of 8.5%, on average.
The Zacks Consensus Estimate for revenues is pegged at $45.05 billion compared with the prior-year quarter’s reported figure of $45.17 billion.
Factors to Note
Kroger appears to be navigating a tough operating landscape characterized by a tightening consumer spending environment, thanks to higher interest rates, reduced savings and fewer government benefits. Also, the grocery industry is witnessing increased competition, with retailers actively working to reduce prices and expand their range of budget-friendly food options. Factors like these may have put pressure on first-quarter results.
For fiscal 2024, the company anticipates identical sales growth, excluding fuel, between 0.25% and 1.75%. Kroger expects these sales figures to strengthen as the year progresses, reflecting initial setbacks from SNAP reductions in early 2024, coupled with milder inflation rates. Inflation is projected to be at its lowest in the first quarter, with an expectation of gradual increases throughout the year. Consequently, identical sales, excluding fuel, are anticipated to start at or slightly below the lower end of the annual forecast in the first quarter.
Apart from this, the company has been seeing higher operating, general and administrative (OG&A) expenses.
That said, Kroger's well-defined customer segmentation strategy, emphasis on value and focus on its 'Our Brands' portfolio have been working well. The company remains committed to its core strengths, including an array of fresh products, personalized shopping experiences and a seamless digital ecosystem, all aimed at sustaining momentum.
Kroger's strategic initiatives, including "Leading with Fresh" and "Accelerating with Digital", have been aiding. The company’s digital business has become a key driver, powered by strategic initiatives like the Delivery Now program, the Boost membership program and the expansion of customer fulfillment centers. Additionally, Kroger has been optimizing its supply chain and inventory management to maintain high customer satisfaction levels. These upsides are likely to have contributed to Kroger’s upcoming results.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for The Kroger Co. this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
The Kroger Co. currently carries a Zacks Rank #3, and it has an Earnings ESP of +0.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some more companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
CarMax, Inc. (KMX - Free Report) currently has an Earnings ESP of +0.73% and a Zacks Rank of 3. The company is likely to register a top-and-bottom-line decrease when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for CarMax’s quarterly revenues is pegged at $7.23 billion, which implies a decline of 5.9% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CarMax’s quarterly earnings of $1.02 suggests a drop of 12.1% from the year-ago quarter’s levels. However, KMX has a trailing four-quarter earnings surprise of 12.9%, on average.
General Mills (GIS - Free Report) currently has an Earnings ESP of +0.93% and a Zacks Rank #3. The company is likely to register a decrease in the top line when it reports fourth-quarter fiscal 2024 numbers. The consensus mark for revenues is pegged at $4.87 billion, which implies a decline of 3.1% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for General Mills’ quarterly earnings per share of 99 cents suggests an 11.6% drop from the year-ago quarter. GIS has a trailing four-quarter earnings surprise of 7.2%, on average.
Domino's Pizza, Inc. (DPZ - Free Report) currently has an Earnings ESP of +2.18% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2024 earnings per share is pegged at $3.66, which suggests 18.8% growth year over year.
The Zacks Consensus Estimate for Domino's Pizza’s quarterly revenues is pegged at $1.1 billion, which indicates growth of 7.8% from the figure reported in the prior-year quarter. DPZ has a trailing four-quarter earnings surprise of 9.3%, on average.
Image: Bigstock
The Kroger Co. (KR) Queues for Q1 Earnings: Is a Beat Likely?
The Kroger Co. (KR - Free Report) is likely to register a bottom-line decline when it reports first-quarter fiscal 2024 earnings on Jun 20. The consensus mark for quarterly earnings has remained unchanged in the past 30 days at $1.33 per share. This indicates a decline of 11.9% from the year-ago quarter’s reported figure. However, KR has a trailing four-quarter earnings surprise of 8.5%, on average.
The Zacks Consensus Estimate for revenues is pegged at $45.05 billion compared with the prior-year quarter’s reported figure of $45.17 billion.
Factors to Note
Kroger appears to be navigating a tough operating landscape characterized by a tightening consumer spending environment, thanks to higher interest rates, reduced savings and fewer government benefits. Also, the grocery industry is witnessing increased competition, with retailers actively working to reduce prices and expand their range of budget-friendly food options. Factors like these may have put pressure on first-quarter results.
For fiscal 2024, the company anticipates identical sales growth, excluding fuel, between 0.25% and 1.75%. Kroger expects these sales figures to strengthen as the year progresses, reflecting initial setbacks from SNAP reductions in early 2024, coupled with milder inflation rates. Inflation is projected to be at its lowest in the first quarter, with an expectation of gradual increases throughout the year. Consequently, identical sales, excluding fuel, are anticipated to start at or slightly below the lower end of the annual forecast in the first quarter.
Apart from this, the company has been seeing higher operating, general and administrative (OG&A) expenses.
The Kroger Co. Price, Consensus and EPS Surprise
The Kroger Co. price-consensus-eps-surprise-chart | The Kroger Co. Quote
That said, Kroger's well-defined customer segmentation strategy, emphasis on value and focus on its 'Our Brands' portfolio have been working well. The company remains committed to its core strengths, including an array of fresh products, personalized shopping experiences and a seamless digital ecosystem, all aimed at sustaining momentum.
Kroger's strategic initiatives, including "Leading with Fresh" and "Accelerating with Digital", have been aiding. The company’s digital business has become a key driver, powered by strategic initiatives like the Delivery Now program, the Boost membership program and the expansion of customer fulfillment centers. Additionally, Kroger has been optimizing its supply chain and inventory management to maintain high customer satisfaction levels. These upsides are likely to have contributed to Kroger’s upcoming results.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for The Kroger Co. this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here.
The Kroger Co. currently carries a Zacks Rank #3, and it has an Earnings ESP of +0.83%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks With the Favorable Combination
Here are some more companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings this reporting cycle.
CarMax, Inc. (KMX - Free Report) currently has an Earnings ESP of +0.73% and a Zacks Rank of 3. The company is likely to register a top-and-bottom-line decrease when it reports first-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for CarMax’s quarterly revenues is pegged at $7.23 billion, which implies a decline of 5.9% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CarMax’s quarterly earnings of $1.02 suggests a drop of 12.1% from the year-ago quarter’s levels. However, KMX has a trailing four-quarter earnings surprise of 12.9%, on average.
General Mills (GIS - Free Report) currently has an Earnings ESP of +0.93% and a Zacks Rank #3. The company is likely to register a decrease in the top line when it reports fourth-quarter fiscal 2024 numbers. The consensus mark for revenues is pegged at $4.87 billion, which implies a decline of 3.1% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for General Mills’ quarterly earnings per share of 99 cents suggests an 11.6% drop from the year-ago quarter. GIS has a trailing four-quarter earnings surprise of 7.2%, on average.
Domino's Pizza, Inc. (DPZ - Free Report) currently has an Earnings ESP of +2.18% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2024 earnings per share is pegged at $3.66, which suggests 18.8% growth year over year.
The Zacks Consensus Estimate for Domino's Pizza’s quarterly revenues is pegged at $1.1 billion, which indicates growth of 7.8% from the figure reported in the prior-year quarter. DPZ has a trailing four-quarter earnings surprise of 9.3%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.