Kroger, which raised its annual sales target on Friday, has also invested in sprucing up curbside pickups.Jeff Dean/The Associated Press
Kroger KR-N bumped up its annual identical sales forecast on Friday, betting on demand for groceries to sustain even in the midst of some restraint on spending from Americans due to tariff-induced uncertainty.
U.S. President Donald Trump’s sweeping tariff policy has rattled global markets, raising fears of persistent inflation in the United States due to impending price hikes on imported goods.
Most other retailers have either lowered or withdrawn their financial targets for the year.
While Kroger raised its target for full-year 2025 identical sales growth to 2.25 per cent to 3.25 per cent, from 2 per cent to 3 per cent expected earlier, the company maintained its annual profit forecast, with new CFO David Kennerley noting in a statement that the macroeconomic environment remained uncertain.
Bellwether Walmart also maintained its annual profit forecast, while Target cut its sales guidance for the year.
Kroger reported a first-quarter identical sales growth of 3.2 per cent, beating analysts’ average expectation of 2.4 per cent, according to estimates compiled by LSEG.
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Maintaining the company’s profit target was “good news,” Telsey Advisory Group analyst Joe Feldman said.
“We don’t see it [in] any company’s interest to raise guidance this early after only one quarter, even with the beat.”
Kroger’s shares were up 3 per cent in early trading. They have risen about 7 per cent so far this year.
The company has invested in sprucing up its curbside pickups as well as its more affordable private label brands as it battles stiff competition from Walmart.
It has also benefited from an uptick in its pharmacy business, driven by the popularity of GLP-1 weight-loss drugs.
Kroger’s top brass underwent a shakeup in recent months, with long-time CEO Rodney McMullen resigning following an investigation into his personal conduct.
Kennerley, a former PepsiCo executive, also began his tenure as finance chief at the grocer in April.
The grocer’s gross margin was 23 per cent of sales for the quarter ended May 24, compared with 22 per cent a year ago.
The company also noted an impairment charge of US$100-million in the first quarter, over the closure of about 60 stores over the next 18 months.