Kroger stock continues to soar on Q4 report, battle with FTC
Shares of Kroger (KR) are surging after the company posted positive fourth-quarter earnings results, beating revenue and adjusted EPS estimates. In addition, the company will continue its efforts to fight the FTC for its acquisition of Albertsons (ACI).
Yahoo Finance Retail Reporter Brooke DiPalma joins the Live show to break down the report and discuss how consumers are feeling in regards to the price of groceries.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Nicholas Jacobino
Video Transcript
- Shares of Kroger, they are surging after reporting a beat on the top and bottom line for the fourth quarter, company also posting a better than expected full year profit outlook. And that was it, Julie, sees adjusted EPS 430 to 450 this year. Consensus was more like 428.
- Yeah, it's very interesting here, because on the one hand, we hear in many different quarters that people are very unhappy, that they're still paying higher prices, even though the prices are rising at a lower rate, but then CEO Rodney McMullen saying shoppers say they feel better. So it's kind of an interesting situation here. And I guess the proof is in the pudding, that is in the numbers and in the fact that the company is forecasting earnings per share ahead of estimates. And then they expect same store sales to grow, to continue to grow this year. So it's interesting, an economic indicator as well as a Kroger indicator, I guess.
- Let's also bring in now Yahoo Finance's Brooke DiPalma for more on this. What did you make of the report, Brooke? Walk us through it.
BROOKE DIPALMA: Yeah, good afternoon. I mean, certainly the biggest takeaway from the report is that Wall Street's certainly liking this. Kroger shares are set for their highest close since May 4, 2022. But what I was really focusing on was that Albertsons acquisition. Will it happen, especially after the FTC challenged the acquisition last week?
Now, the FTC largely saying here that this will eliminate fierce competition between Kroger and Albertsons, then leading to higher prices for groceries, and also lead to a loss of competition here for lower quality products and services. They also said that the FTC is saying that it could threaten the ability for higher wages. And Kroger really setting the stage here, really saying that's not the case, CEO Rodney Mullen saying, first and foremost, they're laser focused on this merger.
They did give us a timeline a bit here, saying that hearing dates have not been set yet, but they do expect these to proceed in mid to late summer, and as you can see on the screen right now, them acknowledging that challenge from the FTC, saying that while we're disappointed about the recent attempt to challenge a merger, we're not surprised given the current political environment. And they also said that based upon previous mergers, they've been able to lower prices. They've been able to invest in associates' wages and improve the customer experience. And they also promised that they will secure jobs for union largely criticized under these mergers as well.
