Kroger Falls on Guidance Miss, Plans to Boost Wages By Investing.com

By Dhirendra Tripathi

Investing.com – Kroger (NYSE:KR) shares were trading 4% weaker Wednesday after its 2021 guidance missed expectations and the company said it would increase wages.

Full-year earnings per share are expected at $2.75 to $2.95, compared to the $2.81 consensus, according to Seeking Alpha. Operating profit is expected in the range of $3.3 billion to $3.5 billion and profit between $3.30 per share and $3.50 per share. Capital expenditures are set to be between $3.4 billion and $3.6 billion.

Profit over the past several quarters has bested analyst estimates as we cooked at home because we weren’t allowed out to play. The stock had rallied over the past month to the highest in about five years.

Same-store sales, without fuel, for the supermarket chain increased by almost 11% last year, and digital sales more than doubled, but. Ahead of its investor day webcast earlier today, the grocer said it would invest $350 million to raise the average wage to $16 an hour from $15.50.  

The current consensus among 8 TipRanks analysts is for a ‘moderate sell’ rating of shares in Kroger, with an average price target of $32.43, 11% lower from the current levels. The analysts’ price targets range from a high of $39 to a low of $28.