US retailer Kroger raised its forecast for annual profit and posted a smaller-than-expected decline in quarterly same-store sales that signalled a gradual easing in demand for grocery from levels seen at the height of the pandemic.
The supermarket chain forecast adjusted profit per share between $2.95 and $3.10 in 2021, versus its prior range of $2.75 to $2.95. Analysts on average were expecting earnings of $2.86 per share.
Chairman and CEO of Kroger, Rodney McMullen, commented, "Kroger's strong execution delivered identical sales results in the first quarter that exceeded our original expectations. Customers are responding to the investments we have made in digital, as evidenced by our triple-digit growth in digital sales since the beginning of 2019.
"We were disciplined in driving costs out of the business and we achieved record growth in Kroger's alternative profit business, demonstrating the power and attractiveness of our long-term model."
Business Growth
The grocer has bolstered its business through its 'Restock Kroger' programme and its partnership with UK-based Ocado Group Plc to use robots to more quickly stock, sort and dispatch goods. It has also tied-up with third parties such as Instacart Inc to handle deliveries.
McMullen stated, "Kroger is even better positioned to connect with our customers than we were prior to the pandemic as a result of our relentless focus on leading with fresh and accelerating with digital.
"I am incredibly proud of our amazing associates who continue to be there for our customers, communities, and each other when they need us most and who strive to deliver a full, fresh, and friendly experience to every customer, every time."
Quarterly Performance
Same-store sales, excluding fuel, fell 4.1% in the first quarter ended 22 May, compared with estimates of a 6.7% decline, according to IBES data from Refinitiv.
Kroger said it expects 2021 adjusted same-store sales to fall between 2.5% and 4%, while it had earlier projected a decline between 3% and 5%. Analysts on average expect same-store sales to decline 4.38%, according to IBES data from Refinitiv.
