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Kroger (KR) to Report Q1 Earnings: What’s in the Cards?


The Kroger Co. KR is slated to release first-quarter fiscal 2017 results on Jun 15. In the trailing four quarters, it outperformed the Zacks Consensus Estimate by an average of roughly 1%. In the preceding quarter, the company reported in-line earnings. Let’s see how things are shaping up prior to this announcement.

The question lingering in investors’ minds now is whether Kroger will be able to post positive earnings surprise in the quarter to be reported. The current Zacks Consensus Estimate for the quarter under review is 57 cents, reflecting a year-over-year decline of over 18%. We note that the Zacks Consensus Estimate has been stable in the past 30 days. Analysts polled by Zacks expect revenues of $35,475 million, up more than 2% from the year-ago quarter.

Factors at Play

A dominant position among the nation’s largest grocery retailers enables Kroger to sustain sales growth, expand store base and boost market share. We believe there remain enormous opportunities to augment identical supermarket sales, alleviate gross margin pressure and improve operating margin. In our view, Kroger’s long-term earnings per share growth rate target of 8–11% seem achievable. However, stiff competition, deflationary environment and cautious consumer spending are making things tough for the company. Management had earlier projected first-quarter earnings in the band of 55–59 cents a share.

Kroger Company (The) Price, Consensus and EPS Surprise

Kroger Company (The) Price, Consensus and EPS Surprise | Kroger Company (The) Quote

What Does the Zacks Model Unveil?

Our proven model does not conclusively show that Kroger is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kroger has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 57 cents. Kroger’s Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the favorable combination of elements to post an earnings beat:

Darden Restaurants, Inc. DRI has an Earnings ESP of +1.74% and a Zacks Rank #2.

Expedia, Inc. EXPE has an Earnings ESP of +3.28% and a Zacks Rank #3.

Fastenal Company FAST has an Earnings ESP of +2.04% and a Zacks Rank #3.

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