Kroger Co (NYSE:KR, XETRA:KOG) raised its full-year profit outlook after posting second-quarter earnings that beat Wall Street estimates, even as the grocer trimmed its sales growth forecast.
The company reported adjusted earnings per share of $1.09 for the quarter, ahead of analyst estimates of $1.06 and up 5% from a year earlier. Revenue came in at $34.6 billion, roughly in line with estimates of $34.58 billion and up 2% year-over-year.
Adjusted FIFO operating profit reached $1.08 billion, topping estimates of $1.01 billion, though the figure was down 1% from the prior year.
Kroger cut its full-year guidance for identical sales excluding fuel, now expecting growth of 0.2% to 0.8%, down from a prior range of 1.0% to 2.0%. Identical sales excluding fuel grew 0.2% in the quarter.
The company affirmed the rest of its full-year guidance, including adjusted earnings per share of $5.10 to $5.30, free cash flow of $2.7 billion to $2.9 billion, and capital expenditures of $3.8 billion to $4.0 billion. It also raised its outlook for adjusted FIFO operating profit to $5.0 billion to $5.2 billion, above estimates of $4.84 billion. The company expects a tax rate of 23%.
Gross margin for the quarter was 22.4%, down 10 basis points from a year earlier. Adjusted eCommerce sales grew 20% year-over-year, while profit from Kroger Precision Marketing, the company's retail media business, rose 24%.
CEO Greg Foran said he was “pleased with the progress” the company is making.
“Our teams kept driving value for customers, improving execution in our stores, growing eCommerce profitably and managing costs with discipline,” Foran said in a statement.
“Improving sales momentum remains a top priority. While there is more work to do, I am confident in our plan to become America's favorite grocer."
Shares of Kroger were up around 4% on Friday morning.
