Kroger Co (KR) held onto its 2020 earnings guidance Wednesday, but cautioned that sales throughout the year are likely to remain volatile as consumer demand evolves alongside the coronavirus pandemic.
Kroger said it expects first quarter sales to be better than the annual growth rate of 2.25% it forecast on March 5. It also sees adjusted earnings for the year in the range of $2.30 to $2.40 per share. The grocery store group will also pause its share buyback program for the fiscal first quarter, which ends on April 30, and said it has borrowed $1 billion from a standby credit facility.
Kroger said March activity accelerated "sharply", with identical sales rising 30%, thanks in part to "dramatically heightened demand in the middle of the month" amid customer stockpiling, which then tapered off in the final week of the month "as customers adjusted to the new dining, work and travel restrictions."
"Kroger's most urgent priority is to provide a safe environment for associates and customers, with open stores, comprehensive digital solutions and an efficiently-operating supply chain, so that our communities have access to fresh, affordable food and essentials," said CEO Rodney McMullen. "We are so proud of our dedicated associates who are on the front lines serving our customers when they need us most."
"A huge thank you to all of our associates, whose efforts are nothing short of heroic," he added.
Kroger shares were marked 3.25% higher in early Wednesday trading, against a 2.8% slide for the S&P 500 benchmark, to change hands at $31.15 each.