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Kroger's (KR) Q2 Earnings in Focus: What to Expect?

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The Kroger Co.KR , one of the largest grocery retailers, is scheduled to release second-quarter fiscal 2015 results on Sep 11. The big question facing investors is, whether the company will be able to continue with its positive earnings surprise streak in the quarter to be reported. In the trailing four quarters, Kroger outperformed the Zacks Consensus Estimate by an average of 7.9%. Here's a discussion on the determinants of the second-quarter results:

Zacks Model Shows Unlikely Earnings Beat

Our proven model does not conclusively show that Kroger is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. Kroger has an Earnings ESP of 0.00% as the Most Accurate estimate and the Zacks Consensus Estimate both stand at 40 cents. The company carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, the company's ESP of 0.00% makes surprise prediction difficult.

Factors Influencing this Quarter

A dominant position among the nation's largest grocery retailers enables Kroger to sustain growth, expand store base and boost market share. However, intensifying price competition among grocery stores to lure budget-constrained consumers may adversely impact the company's sales and margins. This, in turn, may hurt Kroger's bottom line in the quarter to be reported.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Constellation Brands Inc. STZ has an Earnings ESP of +6.11% and a Zacks Rank #2 (Buy).

Conns Inc. CONN has an Earnings ESP of +31.92% and a Zacks Rank #3.

Rite Aid Corporation RAD has an Earnings ESP of +33.33% and a Zacks Rank #3.

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KROGER CO (KR): Free Stock Analysis Report

RITE AID CORP (RAD): Free Stock Analysis Report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

CONNS INC (CONN): Free Stock Analysis Report

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


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

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