- Shares of Kroger spiked almost 13% Thursday after the grocery chain blew thorough Wall Street earnings expectations.
- It’s a much needed rebound for the struggling grocery chain.
Shares of Kroger spiked as much as 12.72% in trading Thursday morning after the grocery chain reported better-than-expected third-quarter earnings thanks to an already strong holiday season that has been fuelled by aggressive discounts.
The Cincinnati-based chain, which operates about 2,800 stores, reported a 4.5% uptick in total sales and a resulting revenue of $US27.75 million – above the $US27.48 million expected by Wall Street analysts.
It’s a much needed rebound after the stock tanked almost 20% in June after a disappointing first quarter.
“The holidays are always Kroger’s time to shine. In fact, we had our best ever Black Friday results for general merchandise, led by record sales at Fred Meyer. Everything we are doing revolves around our associates providing friendly service and fresh products to our customers,” Chairman and CEO Rodney McMullen said in a press release.
“This quarter shows that by investing for the future, our business continues to improve and gain momentum. We remain confident in our ability to continue to grow identical supermarket store sales and market share for the balance of the year and in 2018.”
Kroger and other traditional grocery stores are facing intense competition from Amazon, who recently purchased the Whole Foods Marke chain, as well as from newer entrants, like Aldi and Lidl, who also hope to disrupt the American grocery market.
Analysts now have an average price target of $US23.67 for the stock, according to Bloomberg data – about 11% below the stock’s $US26.69 price Thursday midmorning.
Shares are still well below their peak of $US42.64 set back in December 2015, and are down 20.8% so far this year.
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