Kroger raises full-year guidance after strong Q2 earnings
Yahoo Finance Live anchors discuss second-quarter earnings for Kroger.
Video Transcript
- Kroger, coming out raising its forecast. What are you shrugging for, Sozz?
- I don't know, just Kroger doesn't do it for me, sometimes.
- Kroger doesn't do it for you sometimes? How many companies are coming out here and raising forecasts? What does it take to impress you, Brian Sozzi?
- I need stories like Kohl's. I need things falling off the map. That really gets me going. But look, not a bad--
- The earnings per share this year are going to be as high as $4.05 a share. And the previous forecast upper end was $3.95.
- Maybe because I'm not a Kroger shopper, I can't get excited about it.
- But in this environment--
- This is a good quarter.
- Listen--
- Good quarter.
- In this environment, raising a forecast--
- Is good.
- And it's pretty rare that we are seeing this. It does say, you know, I am seeing some commentary that this wasn't unexpected.
Part of the thing here is that Kroger, like many grocery stores in this period, people trade down to private label. Private label tends to be higher margin.
And so that seems to be the case at Kroger. And that seems to be what's driving some of this.
- And also, too, a lot of these results from Kroger, these strong sales gains reflect the price increases that they have to pass through from their vendors. Campbell's Soup, McCormick, all these companies, Pepsi, Coke, they have all increased prices. That, of course, will impact or positively influence Kroger sales.
And I go back to what Walmart CFO John Rainey told us a couple of weeks ago. People are trading down to tuna fish from chicken. And that is still the environment out there. And Kroger looks to be benefiting from it.
- Or they're trading down to Kroger brand. It's not called Kroger brand, though, I don't think.
- I'm not touching Kroger tuna.
- I don't remember what their store brand is called. But they're trading down to that versus buying, I don't know, Starkist or whatever the--
- The only private label tuna I trust is anything from Costco. Costco, way to go. They come in the big cans. I think it was Kirkland. How can you not trust Kirkland tuna fish?
- Trader Joe's. I go for Trader Joe's also.
- OK. That's good too.
- That's store brand as well. Our crack director, by the way, bringing us the information that it was Flamingo Racing ringing the opening bell there, which is a cycling team.
Flamingo Racing's mission, to provide opportunities for women with diverse backgrounds to pursue their goals in women's cycling. So that's who was up there.
- Before we go, I must correct myself. We're getting a lot of positive feedback on Kroger here from the Yahoo Finance community.
- Yes, big fans.
- Big fans. We have, clean stores, well spaced, lots of good fresh bakery items. They sell wine. Good quality store brand meat, just saying, as one of our awesome teammates just was Slacking to us here in the early going.
So maybe Kroger deserved this quarter, [INAUDIBLE], good sales game. All because of the bakery.
- Oh, now you're more excited about it.
- Well, you know. I need to go to Kroger. I need to go to Kroger.
