The Cincinnati company's stock recently traded at $31, down 4%. It had climbed 11% year to date through Wednesday.
In the fiscal 2021 third quarter ended Nov. 7, sales climbed 6.3% to $29.72 billion, trailing the FactSet analyst consensus of $29.97 billion. Same-store sales grew 10.9%, exceeding the consensus estimate of 10.6%.
Profit more than doubled to $631 million, or 80 cents a share, from $263 million, or 32 cents a share, in the year-earlier quarter.
Adjusted earnings per share ascended to 71 cents from 47 cents, with the latest figure topping the analyst consensus of 67 cents.
Kroger anticipates full-year adjusted EPS will total $3.30 to $3.35, compared with the analyst consensus of $3.30. It sees same-store sales rising about 14%, above the analyst consensus of 12.5%.
After Kroger’s last earnings report in September, Morningstar analyst Zain Akbari raised his fair value estimate to $33 from $31.50.
“We are encouraged that Kroger’s performance came despite its prudent moves to strengthen its customer relationships through continued thoughtful, targeted promotions,” he wrote in a commentary then.
“Although the move has a near-term cost and contrasts with other grocers, we believe the decision will help Kroger retain more of the new customers it has gained through the pandemic, particularly as its digital growth (127% in the [second] quarter) persists, with repeat usage needed to leverage fixed costs.”
Further, “as its partnership with no-moat Ocado (OCDDY) develops an efficient parallel fulfillment architecture for home delivery orders, … Kroger should be able to navigate a pandemic-accelerated omnichannel transition better than its pure-play rivals.”