Kroger Co on Thursday reported bumper quarterly results and forecast annual profit above Wall Street estimates, as the U.S. grocer bets on higher food prices and embarks on cost-cutting measures across its digital business and supply chain.
Kroger would invest $770 million more this year to raise hourly wages and improve healthcare benefits for its employees, Chief Executive Rodney McMullen said on an earnings call. It had over the past year raised its average hourly wage to $18.
"Compared to the rest of the retail industry, Kroger's outlook ... was surprising to us because we would have expected Kroger to take extreme conservatism this year given the very volatile macro environment," CFRA Research analyst Arun Sundaram said.is under pressure from some U.S. lawmakers and consumer advocacy groups, but Kroger said it was on track to seal the deal in early 2024.
The company forecast adjusted per-share earnings between $4.45 and $4.60 for fiscal 2023, above Refinitiv estimates of $4.20. Still, Kroger projected same-store sales growth below expectations for 2023, as it expects food inflation to ease in the back half of the year. Reporting by Deborah Sophia in Bengaluru; Editing by Anil D'Silva, Sriraj Kalluvila and Krishna Chandra Eluri
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