Kroger: Sales are way up, and they'll stay up

 

Alexander Coolidge, Cincinnati Enquirer

Sep 11, 2020

 

Kroger's winning streak amid the COVID-19 pandemic continued Friday as the Cincinnati-based grocer reported second-quarter results that beat Wall Street expectations.

 

The nation's largest supermarket chain posted an $819 million profit on sales of $30.5 billion – with profits nearly tripling (up 175.8%) and revenues climbing 8.2% from the same period last year.

 

Kroger and other food retailers have benefited from a huge 2020 shift to groceries as consumers slashed restaurant dining to avoid crowds and potential exposure to the new coronavirus.

 

Shopping habits have sustained the shift enough to prompt Kroger to update its 2020 guidance for the first time since March: the grocer now predicts identical store sales excluding fuel sales will jump an astonishing 13+% – more than five times the previous  forecast of 2.25% growth.

 

Kroger also increased its predicted profits with annual earnings per share expected to range between $3.20 to $3.30 (suggesting an annual profit of $2.6 billion), up more than a third from the old range of $2.30 to $2.40 per share.

 

"We delivered extremely strong results in the second quarter," said CEO Rodney McMullen, in a statement. "We are more certain than ever that the strategic choices and investments made ... have positioned Kroger to meet the moment, especially as customers are rediscovering their passion for food at home."

 

Kroger said its digital sales more than doubled in the quarter, up 127%.

 

The timing of the national crisis luckily occurred a few years after Kroger sped up the development of its online sales business that permits customers to purchase groceries via the Internet for doorstep delivery or parking lot pickup...

 

more

https://www.cincinnati.com/story/money/2020/09/11/kroger-sales-jump-digital-sales-more-than-double/3461188001/

 

 

Kroger Earnings Preview: Watch For Subscription Services

 

By PYMNTS

September 9, 2020

 

Kroger will announce its earnings on Friday (Sept. 9) at the market’s open, marking the end of an aggressive second quarter in which the supermarket giant finds itself competing beyond its traditional category competition and going up against Amazon and Walmart.

 

By the numbers, analysts are expecting about a 5 percent revenue increase over Q1. The overall number is consistent with the supermarket industry, but more importantly, Kroger will need to show that it continues to capture the digital shift for grocery. Its eCommerce numbers grew 97 percent in Q1 compared to 2019 numbers. A good deal of that success depends on the Kroger Ship program, which had been in place since 2018, but has ramped up in terms of infrastructure and usage during the pandemic.

 

"The expansion of our Kroger Ship platform will continue to bring together our industry-leading customer insights and merchandising data to offer our customers a digital shopping experience that includes staples available in our physical stores as well as products that are exclusive to Kroger.com," said Stuart Aitken, Kroger's senior vice president and chief merchant and marketing officer, in a statement. "As part of our continuing transformation, we look forward to accelerating the development of our e-commerce platform and providing our customers with even more choices."

 

Where will that expansion come from? The earnings call on Friday could be notable for Kroger’s reaction to Walmart’s new subscription and delivery service, Walmart+.  Kroger has countered with tests of a service called Delivery Savings Pass, which allows consumers to get unlimited delivery via Instacart of grocery orders over $35 for a $79 annual fee. Several reports say the new service is being tested in Dallas and Southern California, and could be rolled out nationally to include more loyalty perks, possibly tying in gasoline.

 

Internally, the company has been focused on the Restock Kroger program, its initiative to become a digital-first retailer while extending store services to the customers who want them. Analysts are expecting to hear more about that on Friday...

 

more, including links

https://www.pymnts.com/news/retail/2020/kroger-earnings-preview-subscription-services/