Key facts
- Kroger reported Q1 sales of $46.12 billion, exceeding the $45.47 billion estimate.
- Sales were boosted by demand for lower-priced essentials and faster delivery.
- Identical sales without fuel increased 1.0% in the first quarter.
- Adjusted FIFO operating profit was $1,544 million and adjusted EPS was $1.58.
- Kroger maintained its annual financial forecasts.
- The company missed quarterly profit estimates.
Kroger reported first-quarter sales of $46.12 billion, surpassing analysts' estimates of $45.47 billion, driven by demand for essentials and faster delivery. Despite beating sales expectations, the U.S. grocer maintained its annual forecasts unchanged, reflecting cautious consumer spending amid inflationary pressures. The company's identical sales, excluding fuel, increased by 1.0% in the quarter. Kroger posted adjusted earnings per share of $1.58, slightly missing the estimated $1.59 per share. CEO Greg Foran expressed confidence in the company's market position and strategic direction, noting that Kroger is preparing to cut prices on thousands of items, partly funded by cost reductions and reinvesting savings into lower shelf prices. Increased expenses from investments in private-label brands, promotions, new store openings, and digital capabilities, coupled with higher fuel sales and transportation costs, weighed on its margins, with quarterly gross margin coming in at 22.7% compared to 23% a year ago.