Kroger is the IBD Stock Of The Day after an earnings beat for the holiday quarter. On Thursday, Kroger stock jumped back into a buy range after finding key support earlier this week.
Better-than-feared Q4 Kroger earnings, highlighted by strong digital sales, make the grocery retail stock a candidate for investing watchlists in the current market pullback from record highs.
On Thursday, the Walmart and Costco grocery rival also unveiled a $5 billion accelerated share-repurchase plan. Kroger champions "great quality at low prices" and on Thursday touted higher customer loyalty in 2024 on Boost membership improvements.
Three analysts hiked price target on KR stock after the Q4 report, FactSet shows. No one cut.
Kroger Stock Jumps Back Into Buy Range, Near Record Highs
Shares of Kroger popped 2% in big volume in Thursday's stock market action. Kroger stock returned to buy range from a Feb. 3 breakout past a cup-base buy point at 63.59, according to MarketSurge charts. The grocery retailer had pulled back from that rebound to test support at its 50-day moving average prior to its earnings report.
The relative strength line, the blue line in the chart provided here, neared a new high as well. A rising RS line means that a stock is outperforming the S&P 500 index.
An 86 RS Rating means Kroger has outpaced 86% of all stocks in IBD's database over the past year. That rating has risen steadily from 64 a year ago, MarketSurge shows.
Kroger stock has a favorable 21-day ATR of 1.87%. The average true range is a metric available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more gradual moves have lower ATRs.
In a volatile market, IBD suggests stocks with ATRs of 3 or below.
Kroger Earnings And Outlook
The IBD Stock Checkup tool shows that KR stock holds a Composite Rating of 81 out of 99. IBD's Composite Rating rolls various fundamental and technical metrics into one easy-to-use score.
Kroger owns an EPS Rating of 71 out of a best-possible 99. The EPS Rating reflects recent earnings weakness. Kroger's earnings per share fell in three of the last four quarters, including a double-digit drop in the just-reported Q4. But Kroger generated average earnings growth of 8% over the past three years.
Early Thursday, Kroger posted a 15% earnings decline to $1.14 per share, less than a feared 17% drop to $1.11, according to FactSet. Revenue fell 7.4%, year over year, to $34.31 billion, a slight miss.
That marked the second straight quarter of revenue declines for the grocer, whose chains include the namesake Kroger, Ralphs and Dillons. For the full fiscal year, Kroger's earnings per share fell 6% to $4.47.
Kroger highlighted 11% digital sales growth in the fourth quarter, ended on Feb. 1, and a 10% increase in digital sales for the full year. "Double-digit sales growth contributed to making e-commerce more than a $13 billion business annually," a Kroger earnings presentation said on Thursday. But guidance for EPS of $4.60-$4.80 in 2025 came in below estimates for $4.82.
However, that would mark a return to 7.7% earnings growth for the full fiscal year as sales also rebound 1%. Analysts project a further 6.5% earnings gain in fiscal 2026.
Grocery Retail Stocks, Online Grocery Sales
Costco reports earnings after the close on Thursday. BJ's Wholesale Club soared above a buy point on an earnings beat early Thursday.
In fast-growing online grocery sales, Kroger is the No. 3 retailer with an 8.6% share, trailing Walmart at 31.6% and Amazon.com at 22.6%, according to e-Marketer. Americans will spend $220.48 billion buying groceries online in 2025, the firm estimates.
Walmart, Kroger, Costco and Albertsons are among the nation's biggest grocery retailers, including online and offline. A merger try between Kroger and Albertsons fell apart last year.
Year to date, Kroger stock has rallied around 4%, vs. a 2.3% decline for the S&P 500. Over the past year, KR shares have rallied 26% to record highs.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
