Kroger Shares Fall as 2025 Outlook Misses Expectations Despite Q4 Beats
Investing.com – Shares of Kroger Co. (NYSE: KR), one of the largest grocery chains in the U.S., fell nearly 5% in premarket trading Tuesday after the company issued a lower-than-expected fiscal 2025 outlook despite a better-than-expected fourth-quarter result.
In the recently ended fiscal quarter, Kroger reported earnings per share of $0.93, beating analysts’ estimates of $0.88. Revenue for the period came in at $37.2 billion, slightly above the $36.9 billion forecast.
Comparable sales, excluding fuel, increased 2.5% year over year – significantly higher than the 1.8% estimate and reflecting a recovery in consumption at traditional grocery stores.
However, adjusted EBITDA for the quarter was only $1.49 billion, down slightly 3.2% year over year but still in line with market expectations. Gross margin remained at 22.7%, slightly lower than the prior year (22.9%) due to increased operating costs and a competitive price environment.
“Kroger delivered a solid fiscal year with a strong fourth quarter, driven by our commitment to enhancing the customer experience and optimizing operations,” said CEO Rodney McMullen. “We continue to invest heavily in technology and modern distribution to maintain our leadership position.”
Kroger’s 2025 financial outlook, however, disappointed some investors. The company forecasts adjusted EPS in the range of $4.25 to $4.35, compared to the consensus estimate of $4.48. Comparable sales are expected to increase 1% to 2%, and adjusted EBITDA is expected to range from $6.8 billion to $7 billion.
The company also plans to spend $3.4 billion to $3.6 billion on capital expenditures, primarily on store improvements, logistics, and digital infrastructure. Its effective tax rate is expected to be in the range of 22% to 23%.
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