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The Kroger Co. KR announced plans to hire 10,000 associates in its first hybrid hiring event to be held on Jun 10, via virtual and in-store interviews. The company will recruit employees for its retail, e-commerce, pharmacy, manufacturing and logistics operations. All people including veterans, high school and college students, retirees and people with physical and intellectual disabilities can participate in this employment event by registering. These associates will receive role-specific training along with required resources via FEED desktop, mobile and modern learning platforms like Axonify as well as leadership, career advancement, and inclusion training.
Besides hourly wages, selected individuals will be offered healthcare and retirement benefits. The current national wage rate is at $15 per hour and the company intends to raise it to $16 per hour by investing an additional $350 million. Apart from these, employees will get access to its tuition reimbursement program. This initiative will cover courses starting from GED to Ph.D. and offer up to $21,000 for both part-time and full-time associates. Some other notable benefits include discounts on groceries, electronics, streaming services and travel along with an advance pay option and flexible scheduling of salary via DailyPay. Also, the company is rewarding associates who are fully vaccinated against COVID-19 with a one-time payment of $100.
What Else Should You Know?
Kroger has been gaining from continued demand for fresh, convenient food and meal solutions. With customers still opting for e-commerce solutions for their grocery and other household essentials, the company’s digital business remains a key growth driver. Notably, facilities including the no-contact delivery option, low-contact pickup service, ship-to-home orders and contactless payment solutions like Scan, Bag and Go and Kroger Pay, bode well. Additionally, Kroger’s highly advanced Customer Fulfillment Center (CFC) in Monroe, OH, which comes with vertical integration, machine learning as well as robotics with efficient and affordable delivery services, is likely to support the rising demand for Pickup orders.
Further, the company’s Restock Kroger program, which focuses on investments in omnichannel platforms, identifying margin-rich alternative profit streams, merchandise optimization and lowering expenses, has been gaining traction. Under the program, the company is also passing the benefit of cost containment to customers by lowering prices. The company attained more than $1 billion of cost savings for the third straight year in fiscal 2020. As part of the program, the company is making investments in space optimization, store remodels and technology advancements. It is making an incremental investment in associates — wages, training and development, customers, and infrastructure.
We believe such efforts have helped shares of this Zacks Rank #3 (Hold) company gain 12.7% in the past three months, outperforming the industry’s growth of 11.9%.
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However, it expects to witness lower at-home consumption activities and a drop in pantry loading in the future, as the vaccination drive is gathering pace. As a result, management issued fiscal 2021 guidance and signaled a decline in identical sales, without fuel. The company expects identical sales, without fuel, to be down 3-5% in fiscal 2021. Management now anticipates fiscal 2021 earnings of $2.75-$2.95 per share, down from $3.47 reported in fiscal 2020. Also, healthcare and pension costs along with incremental COVID-related investments remain concerns.
Stocks in the Retail Space
Target Corporation TGT has a Zacks Rank #1 (Strong Buy) and a long-term earnings growth rate of 13.3%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Walmart WMT has a long-term earnings growth rate of 5.5% and a Zacks Rank #2 (Buy).
Dollar General Corporation DG, with a Zacks Rank #2, has an expected long-term earnings growth rate of 12.3%.
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