(Reuters) – Kroger beat quarterly same-store sales expectations on Thursday, benefiting from a surge in customers shopping for its lower priced and freshly sourced groceries at its stores and online.
The US grocer, which faces competition from giants such as Walmart and Amazon.com, has been investing in e-commerce to catch up with customers who are more inclined to shop online.
It has also tried to offer products cheaper than rivals and are trying to not tread above the average market prices as U.S. consumers keep their spending in check by shopping during discounts and deal days.
Identical sales, excluding fuel, rose 2.3% in the third quarter, compared with analysts’ average estimate of 1.77% rise, according to LSEG data.
But its shares slipped 1.2% as Kroger narrowed its annual profit and sales forecasts, saying annual sales will be about $3 billion lower and third-quarter revenue took a nearly $340 million hit from the sale of its specialty pharmacy unit.
The supermarket chain expects fiscal 2024 identical sales, excluding fuel, to grow between 1.20% and 1.50%, compared with its prior forecast of 0.75% to 1.75%.
It forecast adjusted earnings per share between $4.35 and $4.45 for fiscal 2024, compared with $4.30 to $4.50 estimated earlier.
Separately, CEO Rodney McMullen said Kroger is committed to closing its $25 billion mega-merger with Albertsons.
“As we await the courts’ rulings in the regulatory challenge to the merger, we remain confident in the facts and the strength of our position,” he said.
The trial where the U.S. Federal Trade Commission along with several states made their case to block the deal concluded in September.
(This story has been corrected to say that the company expects annual adjusted earnings per share in the range of $4.35 and $4.45, not $4.30 to $4.50, in paragraph 6)
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Arun Koyyur)
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