BUZZ-Street View: Kroger bets on ecommerce margins as food spending weakens
Kroger narrows annual sales forecast due to selective grocery spending. Analysts cut price targets, with median at $75.50. Growth depends on e-commerce profitability. Jefferies sees demand for fresh produce and online sales as positives. J.P.Morgan notes competitive edge and store investments but warns of industry risks. Telsey flags risks from third-party delivery firms. UBS sees unclear business trajectory, relying on e-commerce and pharmacy segments.
Kroger (KR.N) narrowed annual sales forecast on Thursday on signs of shoppers turning more selective on their groceries and fresh produce purchases, while leaning more on promotions
At least five analysts cut PT following results
Median PT of 24 brokerages is $75.50
GROWTH HINGES ON ECOMMERCE PROFITABILITY
Jefferies (“buy,” PT: $80) notes demand for fresh produce and online sales as bright spots alongside cost discipline while competition remains an “overhang”
J.P.Morgan (“neutral,” PT: $71) says Kroger was upbeat on improving competitive edge, e-commerce profitability and store investments, but faces risk from softer industry trends and fierce competition
Telsey Advisory Group (“outperform,” PT: $80) flags longer-term risks from Kroger’s reliance on third-party delivery firms, warning they could turn into rivals, as Instacart is building its own grocery network, or hurt Kroger’s brand with poor service
UBS (“neutral,” PT: $70) believes business trajectory remains “unclear” as KR will need to rely on its ecommerce and pharmacy segments to drive sales, pressuring its profitability
