Kroger Co. Narrows 2024 Guidance Range - Update

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The Kroger Co. (KR) narrowed the ranges of identical sales without fuel, adjusted FIFO operating profit and adjusted EPS guidance. For fiscal 2024, the company now expects adjusted net earnings per share in a range of $4.35 - $4.45, revised from prior guidance range of $4.30 - $4.50. Adjusted FIFO operating profit is now projected in a range of $4.6 - $4.7 billion, updated from prior guidance of $4.6 - $4.8 billion. Identical sales without fuel is now anticipated in a range of 1.20% - 1.50%, revised from previous guidance of 0.75% - 1.75%.

Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business. The company expects to continue to pay its quarterly dividend and expects this to increase over time. Kroger has paused its share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.

On the pending merger with Albertsons, Chairman and CEO Rodney McMullen, stated; "As we await the courts' rulings in the regulatory challenge to the merger, we remain confident in the facts and the strength of our position. The food industry has always been competitive and will continue to be after this merger. We are committed to closing this merger."

Q3 Results:

The company's third quarter earnings came in at $618 million, or $0.84 per share compared with $646 million, or $0.88 per share, prior year. Adjusted EPS was $0.98 compared to $0.95. Analysts on average had expected the company to earn $0.98 per share, according to figures compiled by Thomson Reuters. Analysts' estimates typically exclude special items. Adjusted FIFO operating profit was $1.02 billion, flat with previous year.

The company's revenue for the quarter fell 1.0% to $33.63 billion from $33.96 billion last year. Analysts on average had estimated $34.2 billion in revenue. Excluding fuel and Kroger Specialty Pharmacy, sales increased 2.7% from last year. Identical sales without fuel increased 2.3%, for the quarter.

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