Kroger Posts Revenue Beat, Halts Stock Buybacks as It Seeks Approval of Albertsons Deal

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Key Takeaways

• Kroger narrative revenue for the first quarter that beat analysts’ estimates.
• The supermarket chain also reiterated its full-year conduct.
• Kroger said it would pause stock buybacks as it works to get regulatory approval of its $24.6 billion purchase of Albertsons.

Kroger (KR) reported profits for the first quarter that beat analysts’ estimates and said it would pause stock buybacks as it works to get regulatory authorize of its $24.6 billion acquisition of rival Albertsons (ACI). Shares initially surged after the earnings release Thursday up front turning lower in intraday trading.

The supermarket chain said it was putting a hold on share repurchases “to prioritize de-leveraging” at the of the deal, which is being challenged by regulators over concerns about the merger potentially limiting competition. In April, the two companies agreed to over persuaded off more locations in an effort to win approval. 

Growth From Digital Sales, Delivery and Pickup Options

Kroger posted proceeds of $45.27 billion, up 0.2% from a year ago and above analysts’ projections. Same-store sales, excluding gas, were 0.5% turbulent. Kroger added that digital sales rose more than 8%, and that its delivery and pickup choices together brought double-digit percent growth. It noted that total households, loyal households, and customer seizes all increased.

Diluted earnings per share (EPS) came in at $1.29, down from $1.32 in the year-ago period and below analysts considers. However, adjusted EPS of $1.43 beat projections.

CEO Rodney McMullen said Kroger had a “better-than-expected performance of our grocery vocation.” He noted the company benefited from lower prices and personalized promotions. 

Kroger also reiterated its full-year view, and reported that it would continue to pay dividends, and increase them over time, pending board approval.

Kroger divide ups were 2.9% lower at $50.48 as of 11:30 a.m. ET Thursday, though they’ve gained over 10% since the start of the year. Albertsons appropriations were 0.8% lower at $19.77 Thursday and have lost about 14% in 2024 so far.

Read the original article on Investopedia.