Kroger’s sales soar well ahead of expectations during Q1

Kroger reported a strong first quarter well ahead of Street expectations amid increased grocery spending resulting from the COVID crisis.

The supermarket giant reported income of $1.21 billion, or $1.52 per share, for the quarter ended May 23, up from $772 million, or $0.95 per share, last year. Adjusted EPS were $1.22, easily topping analysts’ estimates of $1.12.

Sales rose to $41.55 billion from $37.25 billion last year, beating estimates of $40.71 billion. Comparable sales, excluding fuel, soared 19.1%. Digital sales skyrocketed 92%.

Kroger said it has invested more than $830 million to reward employees, and safeguard employees, customers and communities during the pandemic. Measure include the hiring of  more than 100,000 employees and the testing of nearly 83,000 patients for COVID-19 in 15 states as was one of only five U.S. retailers to "develop, staff and expand free COVID testing model in partnership with the federal and state governments."

The retailer said that it expects to exceed its original 2020 outlook for same-store sales growth and profit. But it did not reaffirm or provide new 2020 guidance.  

"The COVID-19 pandemic has dramatically changed the outlook for food retail in 2020 and we continue to monitor, evaluate and adjust our plans to address the impact to our business,” the company stated. “There are still many unknown factors related to the long-term impact of COVID-19 that could influence our financial results for the remainder of 2020. We remain confident in our business model as well as our ability to generate strong free cash flow and achieve sustainable and attractive total shareholder returns."