Cincinnati, Ohio-based The Kroger Co. (KR) operates as a food and drug retailer. The company operates combination food and drug stores, multi-department stores, marketplace stores, and price-impact warehouses. With a market cap of $41.4 billion, it operates as one of the world's largest food retailers. The grocery giant is expected to release its Q3 earnings on Thursday, Dec. 5.
Ahead of the event, analysts expect Kroger to report a profit of $0.98 per share, up 3.2% from $0.95 per share reported in the year-ago quarter. The company has surpassed Wall Street’s earnings projections in the past four quarters. In the last reported quarter, its adjusted EPS fell 3.1% year-over-year to $0.93 but still surpassed consensus estimates by 1.1%.
For fiscal 2025, analysts expect Kroger to report an adjusted EPS of $4.46, down 6.3% from $4.76 in fiscal 2024. In fiscal 2026, its adjusted EPS is projected to grow 4% year-over-year, reaching $4.64.
KR stock prices surged 25.4% in 2024, outpacing the S&P 500 Index’s ($SPX) 21.8% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 12.9% returns on a YTD basis.
Despite reporting weaker-than-expected revenue of $33.9 billion, shares of Kroger climbed 7.2% after the release of its Q2 earnings on Sep. 12. Net income rose to $466 million, a significant recovery from the $180 million net loss in the same quarter last year, primarily due to a $1.4 billion opioid settlement charge impacting the prior year's results. However, on an adjusted basis, EPS declined by 3.1% year-over-year and 35% quarter-on-quarter to $0.93, indicating some ongoing earnings challenges.
The consensus opinion on KR stock is moderately bullish, with an overall “Moderate Buy” rating. Out of the 18 analysts covering the stock, 10 recommend a “Strong Buy” and eight advise a “Hold” rating. The mean price target of $59.61 suggests a potential upside of just 3.9% from current price levels.
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