Sept 12 (Askume) – Kroger (KR.N) raised the bottom line of its annual sales forecast on Thursday after reporting quarterly results that topped Wall Street expectations as it strives to offer fresh groceries at lower prices, helping to attract customers looking to save money.
Shares of the supermarket chain, which is under antitrust scrutiny over a massive $25 billion deal with smaller rival Albertsons (ACI.N) , rose 1.3% in premarket trading.
American consumers’ household budgets remain tight, leaving them with little room to splurge, even on food and drinks, forcing them to buy things at the best prices in the market.
In an effort to keep up with larger rival Walmart Inc (WMT.N) , Kroger has lowered grocery prices and offered promotions to attract deal-seeking consumers.
The results mirrored those of Walmart and Target (TGT.N) , which raised their annual profit forecasts as Americans flocked to their stores to stock up on cheap essentials.
Grocery stores have also benefited from consumers increasingly choosing to cook at home rather than spend money at restaurants and fast-food chains such as McDonald’s Corp (MCD.N) and Burger King, operated by Restaurant Brands .
Since late August, the FTC has joined several states in a trial in Portland, Oregon, to stop the Kroger-Albertsons deal , saying it would mean a decline in the bargaining power of consumers and higher prices for union grocery workers.
Kroger CEO Rodney McMullen said: “As the FTC’s preliminary injunction hearing concludes, we are confident in the facts and our position. The food industry has always been competitive and this will remain the case following the merger.”
The company’s like-for-like sales, excluding fuel, rose 1.2%, while LSEG’s average expected growth was 0.93%.
Excluding items, Kroger reported an adjusted quarterly profit of 93 cents a share, beating estimates of 91 cents a share.
Like-for-like sales for fiscal year 2024 (excluding fuel) are now expected to grow by 0.75% to 1.75%, while the previous forecast was 0.25% to 1.75%.
