Kroger Co raised its expectations for 2022 profit on Thursday, betting on steady demand for its groceries and household essentials in an inflationary environment.
Major US retailers including Walmart Inc and Target Corp have in recent weeks sounded alarm bells over the toll decades-high inflation is taking on US shoppers, stoking fears the economy could be heading into recession.
But with people prioritising spending on food and household essentials, a shift typical during downturns, Kroger has not been forced to resort to the steep discounts other retailers have required to move stock.
The US supermarket chain forecast earnings per share in a range $3.85 to $3.95 for 2022, compared with its prior range of $3.75 to $3.85. Analysts on average expect $3.85, according to IBES data from Refinitiv.
The company also forecast adjusted same-store sales to rise 2.5% to 3.5% in 2022, compared with its prior range of 2% to 3%. Analysts on average expect 3.2%.
Same-store sales, excluding fuel, climbed 4.1% in the first quarter, compared with estimates of a 4.2% rise.
Kroger CEO Rodney McMullen, commented, "Kroger achieved strong first quarter results as we successfully executed on our strategy of Leading with Fresh and Accelerating with Digital. [...] Our team is doing an outstanding job managing costs in an inflationary environment, which is allowing us to continue to invest in our associates while providing our customers the freshest food at affordable prices when and where they need it.
"Looking ahead, we are well positioned to continue delivering for our customers, investing in our associates, and driving sustainable returns for shareholders."