Grocery chain Kroger Co (NYSE: KR) reported first-quarter results, highlighted by changing trends that are likely to result in permanent habits, Kroger CEO Rodney McMullen said on a Fox Business interview.
Kroger reported quarterly earnings of $1.22 per share, which beat the analyst consensus estimate of $1.09 by 11.93%. The company reported quarterly sales of $41.55 billion, which beat the analyst consensus estimate of $40.72 billion by 2%.
Digital Growth: Kroger reported a 92% increase in digital sales during the quarter as many consumers chose to place orders online for delivery or pickup, McMullen said. To best satisfy the growth, Kroger hired 40,000 new employees to work on the digital side of the business.
Regardless of how consumers interact with Kroger, the company is seeing a new trend playing out as families are cooking together more often, he said. Over time, this could transform into new habits that are here to stay for some time.
Canceling Guidance: Kroger chose not to reiterate its 2020 guidance due to COVID-19 related uncertainties and extra expenses associated with keeping everyone safe, the CEO said. The company confirmed it expects to exceed its prior 2020 EPS guidance of $2.30 to $2.40, but it’s unclear by how much.
Expenses And Wages Update: Kroger expects its continued investments in health and safety to be “meaningful” although manageable compared to overall sales, McMullen said. The company already gave workers a $400 hazard pay bonus and is on track to spend an incremental $800 million in wages throughout 2020.
When it comes to rising overall food prices, Kroger hasn’t come close to passing on the higher costs of meat to consumers.
Kroger’s stock traded down 5.8% to $30.92 per share at time of publication.
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