Kroger tops sales estimates on higher demand for fresh, cheaper groceries

(Reuters) -Kroger topped third-quarter same-store sales expectations on Thursday, benefiting from a surge in customers shopping for its lower priced and freshly sourced groceries at its stores and online.

The U.S. grocer, which competes with retail giants such as Walmart (NYSE:WMT ) and Amazon.com (NASDAQ:AMZN ), has been ramping up its e-commerce investments to keep pace with customers who prefer shopping online.

It launched a 12-day deal event from Dec. 4 where customers can avail a new coupon every day on its website or mobile app.

Walmart had rolled out several deals for Thanksgiving and reduced the fee of its Walmart Plus subscription to $49 from its regular $98 starting end of October through Dec. 2.

"They're both (Walmart and Kroger (NYSE:KR )) attacking online. They both want to be there for the consumer wherever the consumer wants to shop...and they are all getting better at the digital side of the food game," said Telsey Advisory Group analyst Joseph Feldman.

Kroger's identical sales, excluding fuel, rose 2.3% in the third quarter, compared with analysts' average estimate of 1.77% rise, according to data compiled by LSEG.

Excluding items, its adjusted earnings per share of 98 cents was in line with expectations.

But its shares slipped nearly 1% as the supermarket chain narrowed its annual forecasts, saying 2024 sales will be about $3 billion lower due to the sale of its specialty pharmacy unit.

Kroger expects fiscal 2024 identical sales, excluding fuel, to grow between 1.20% and 1.50%, compared with its prior forecast of 0.75% to 1.75%.

It forecast annual adjusted earnings per share between $4.35 and $4.45, compared with $4.30 to $4.50 estimated earlier.

Separately, CEO Rodney McMullen said Kroger is committed to closing its $25 billion mega-merger with Albertsons (NYSE:ACI ).



"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," he said.

The trial where the U.S. Federal Trade Commission along with several states made their case to block the deal concluded in September.

Source: Investing.com