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Yahoo
12 hours ago
- Business
- Yahoo
Why Shares of Kroger Are Surging Today
Kroger reported its first-quarter earnings. Results were mixed, but forward guidance impressed. 10 stocks we like better than Kroger › Shares of the large grocer and retail department chain Kroger (NYSE: KR) had surged by roughly 10%, as of 12:38 p.m. ET today, after the company reported earnings for the first quarter of 2025. Kroger reported adjusted earnings per share of $1.49 for the three months ending May 24 on total revenue of $45.1 billion. Adjusted EPS beat Wall Street estimates, while revenue came in just shy of them. Perhaps more importantly, management maintained its full-year earnings outlook and raised its full-year revenue outlook. Kroger's CFO David Kennerley said in an earnings statement: Our strong sales results and positive momentum give us confidence to raise our identical sales without fuel guidance, to a new range of 2.25% to 3.25%. While first-quarter sales and profitability exceeded our expectations, the macroeconomic environment remains uncertain, and as a result, other elements of our guidance remain unchanged. Kroger certainly surprised investors and is being rewarded right now. The positive news also comes as the company is continuing its search for a new CEO after former CEO Rodney McMullen resigned from his post in March. The company's board of directors earlier this year conducted an investigation into McMullen that concluded "his personal conduct that, while unrelated to the business, was inconsistent with Kroger's Policy on Business Ethics." Kroger's forward price-to-earnings multiple of 15 is toward the bottom of its peer group, and it is a consumer staples stock, making it a good defensive pick for any kind of looming recession. Therefore, I think investors can definitely allocate at least some capital to the name. Before you buy stock in Kroger, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Kroger wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy. Why Shares of Kroger Are Surging Today was originally published by The Motley Fool 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
03-03-2025
- Business
- Yahoo
Kroger shares move lower as it faces an uncertain future after surprise CEO resignation
Kroger (KR) is now at a crossroads: As CEO Rodney McMullen announced his resignation, same-store sale growth lagged behind competition and its proposed merger with Albertsons fell through. On Monday before market open, the company announced McMullen would be stepping down immediately "following a Board investigation of his personal conduct that, while unrelated to the business, was inconsistent with Kroger's Policy on Business Ethics." Kroger family member and industry veteran Ron Sargent was named interim chairman and CEO. Analysts called the announcement surprising. "We thought Kroger would shake up leadership, following the failed merger with Albertson's, but obviously this is not how we envisioned this playing out," CFRA analyst Arun Sundaram told Yahoo Finance. "Despite how things ended for Rodney McMullen, now is a good time to see new leadership at Kroger." The grocer is set to report its fiscal fourth quarter and full-year 2024 report on Thursday before market open. This is one of many C-suite changeups in recent history. Last month, the company announced PepsiCo (PEP) executive David Kennerley would join the company on March 10 and officially succeed interim CFO Todd Foley on April 3. Foley took the interim position after Gary Millerchip left for Costco last February. Its chief merchandising officer, Stuart Aitken, who was a former leading internal candidate per Joe Feldman of Telsey Advisory Group, also stepped down at the end of last year to become CEO of Circana. Shares of the company dropped nearly 2% on Monday. Morningstar analyst Noah Rohr told Yahoo Finance over the phone that investors were considering how these "new faces" would play out for the company and updated guidance. Kroger now expects full-year same-store sales, without fuel, to be at the high end of its guidance range. In the previous quarter, the company shared the expected range of 1.2% to 1.5%. The company also said adjusted earnings would be slightly above the high end of its guidance range. The previously shared range was $4.35 to $4.45. Rohr, who said shares are "slightly overvalued" with a fair price target of $59, noted the updated guidance likely "assuaged some investor concerns" around the "uncertainty with the C-suite." He expects long-term same-store sales growth guidance of 2.0% to 2.5%. Sundaram said 2025 will be a "stronger" year compared to 2024 and is estimating the same range for sales growth. "Food inflation has picked up a little bit. That's typically good for same-store sales growth ... too much inflation is bad, but too little inflation is also bad," he said. As of Monday, analysts on the Street had 13 Buy ratings, 10 Holds, and three Sells on the stock. McMullen's news comes as the grocer's same-store sales growth has lagged behind competitors Walmart (WMT) and Costco (COST). Same-store sales grew 2.3% in the third quarter for Kroger, compared to 7.1% for Costco, which is also set to report its fourth quarter on Thursday. Walmart boasted a 4.9% same-store sales growth in its Q4. "Despite the fact that Walmart and Costco have more discretionary items, [they] are still seeing stronger same-store sales growth than Kroger, which goes to show how strong some of the larger peers are," Sundaram said. Sprouts Farmers Market (SFM) also saw an 11.50% increase. "A few years ago, [Sprouts Farmers Market's] same-store sales growth was significantly lagging everyone else's really, even Kroger's and especially Walmart's and Costco's ... now they've turned it around," Sundaram said. Conventional grocers like Albertsons and Kroger have yet to see that same turnaround, he added. Albertsons only saw same-store sales increase 2% in its latest quarter. For the past two years, Sundaram said the team was also distracted by the failed $24.6 billion merger with Albertsons, which was officially blocked by the Federal Trade Commission in December. Rohr said "even with the increased scale" of the combined company, "they still wouldn't be able to totally rival the larger players," calling it one of many "headwinds" the company has been up against. — Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Click here for all of the latest retail stock news and events to better inform your investing strategy
