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Kroger Q1 earnings were recently released and stock performance is not as expected. Normally when a company exceeds expectations it moves in a positive direction, but this has done the opposite. As of writing this, KR is down ~4% today compared with the DJIA as a whole being down ~0.2%. Is there something I'm missing regarding their financials?

EPS was estimated at $1.09-1.12, and actual is $1.22. Revenue was estimated at $40.71B, and actual is $41.55B.

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Share price doesn't always rise after a company beats its earnings estimates because there are other factors to be considered. A major one can be forward guidance. If lowered, share price will drop regardless of good quarterly earnings numbers. In addition, while the numbers may be better, the company's performance compared to competitors could be lagging. So you need to dig deeper into the numbers.

Generally speaking, sales skyrocketed in the first quarter for food suppliers because shoppers stocked up due to the pandemic. I think that it's a reasonable assumption that now that many are not only stocked up, fear based shopping has declined significantly. Because of that, sales will slow and possibly decline as many will begin to winding down their supplies.

Later today there should be more analysis stories available online.

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  • I listened to their earnings call this morning. Although they're suspending official guidance for the interim, Kroger leadership did mention they expect Q2 sales to experience mid to high single digit growth.
    – DanCo89
    Jun 18, 2020 at 17:04
  • FWIW, Barrons offered this explanation today. Jun 18, 2020 at 17:14

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