Kroger Rallies on Strong Q1, Hits 52-Week High - Analyst Blog

By Zacks Equity Research,

Shutterstock photo

Shares of The Kroger Co. ( KR ) reached a 52-week high of $50.20 yesterday following the company's better-than-expected first-quarter fiscal 2014 results and upbeat outlook. Shares gained over 5% on the index before closing at $49.66. Year to date, the stock has increased 27.4%.

The quarterly results were driven by the company's Customer 1st strategy and acquisition of Harris Teeter. The company posted earnings of $1.09 per share that surpassed the Zacks Consensus Estimate of $1.05, and surged 18.5% year over year. Total sales (including fuel center sales) grew 9.9% to $32,961 million from the prior-year quarter, and also came ahead of the Zacks Consensus Estimate of $32,636 million. Management stated that excluding fuel center sales, total sales rose 11.4%. Including the most recent quarter, the company has beaten the Zacks Consensus Estimate by an average of 4.4% in the trailing four quarters.

Consequently, management raised its fiscal 2014 guidance. Cincinnati-based Kroger now projects fiscal 2014 earnings in the band of $3.19 to $3.27 per share, up from its earlier predicted range of $3.14 to $3.25. The current Zacks Consensus Estimate for fiscal 2014 is $3.22, which could witness an uptrend in the coming days.

Kroger, one of the largest grocery store retailers, has maintained its strong performance despite a challenging macroeconomic backdrop primarily due to sturdy super market sales growth. Quarterly identical supermarket sales (stores that are open without expansion or relocation for 5 full quarters) excluding fuel center sales, increased 4.6% to $24,949 million.

Kroger now envisions identical supermarket sales (excluding fuel) growth of 3% to 4% for fiscal 2014, up from the previous projection of 2.5% to 3.5%.

Further, management continues to deploy capital to concentrate more on remodeling, merchandising and other viable projects. Moreover, acquisitions including that of Harris Teeter will continue to boost the company's momentum.

Currently, Kroger carries a Zacks Rank #2 (Buy). Other stocks worth considering in the retail sector include Inventure Foods, Inc. ( SNAK ), The Hain Celestial Group, Inc. ( HAIN ) and Sprouts Farmers Market, Inc . ( SFM ), all carrying a Zacks Rank #2.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

KROGER CO (KR): Free Stock Analysis Report

HAIN CELESTIAL (HAIN): Free Stock Analysis Report

SPROUTS FMR MKT (SFM): Free Stock Analysis Report

INVENTURE FOODS (SNAK): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: KR , HAIN , SFM , SNAK

More from


Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by