Kroger Co has forecast annual same-store sales and profit above market expectations, betting on strong demand for groceries as the pandemic-induced home-cooking trend holds strong.
Despite the reopening of restaurants and bars, Americans have stuck to cooking and eating more at home as they did during the lockdowns, due in part to hybrid-work trends, boosting sales at grocers.
The company said it expects adjusted same-store sales to rise 2% to 3% in fiscal year 2022, compared with analysts' average estimate of a 2.1% increase, according to IBES data from Refinitiv.
The supermarket chain, which operates nearly 2,800 stores across the United States, said it expects adjusted earnings per share between $3.75 and $3.85 for the year, well above estimates of $3.45.
Kroger's same-store sales, excluding fuel, climbed 4% in the fourth quarter ended 29 January, topping expectations for a 2.84% rise.
Same-store sales, excluding fuel, increased 0.2% in full-year 2021. Total sales amounted to $137.9 billion (€124.5 billion), up from $132.5 billion (€119.6 billion) in the previous financial year.
CEO Rodney McMullen commented, "Our strategy of leading with fresh and accelerating with digital propelled Kroger to record performance in 2021, on top of record results in 2020. We are incredibly proud of our associates who continue to deliver for our customers through the pandemic."
The company hopes to retain business momentum and is confident of its ability to navigate through a rapidly changing operating environment.
McMullen added, "We are leveraging technology, innovation, and our competitive moats to build lasting competitive advantages. Our balanced model is allowing us to deliver for shareholders, invest in our associates, continue to provide fresh affordable food to our customers and uplift our communities."
Big-box rival Walmart also forecast higher earnings and sales for the year after posting its largest-ever holiday season sales last month, while Target earlier this week forecast an upbeat 2022 saying it expects supply chain pressures to ease later in the year.
News by Reuters, additional reporting by ESM – your source for the latest Retail news. Click subscribe to sign up to ESM: European Supermarket Magazine.