A consumer looking for more ways to save money helped Kroger beat profit expectations and provide an upbeat outlook.
Inflation and a slowing economy ars making U.S. shoppers, even the so-called “higher-income” consumers, look for more ways to save money, and that’s what helped grocery chain Kroger Co. beat fiscal fourth-quarter profit expectations, and provide a full-year outlook that was well above Wall Street forecasts.
The company said it has been focusing on improving its pricing relative to key competitors well before inflation starting climbing, and even before the start of the COVID-19 pandemic. Kroger said it has done so by “investment in pricing,” in each of the past 20 years, and by cutting costs by $1 billion for the past six years.
Another way customers have been saving is by buying Kroger-branded products: “They can save 7% to 10% by buying Our Brands versus national brands,” McMullen said. The company reported before Thursday’s opening bell net income for the quarter to Jan. 28 that fell to $450 million, or 62 cents a share, from $566 million, or 75 cents a share, in the same period a year ago. But excluding non-recurring items, such as goodwill and impairment charges, adjusted earnings per share rose to 99 cents from 91 cents to beat the FactSet consensus, or average analyst estimate compiled by FactSet, of 90 cents.
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