Kroger’s Q1 Earnings Drop Tomorrow: Will It Beat Wall Street’s Grim Expectations?

Grocery giant Kroger steps into the earnings spotlight tomorrow—just as inflation-weary shoppers tighten their belts.

The Setup: Analysts already priced in the 'pain narrative'—now we see if management can spin blood into wine.

Watch For: Margin magic (or misery), same-store sales sleight of hand, and whether they blame 'transitory' supply chain issues like every other CFO this season.

Bottom Line: In a sector where pennies count, Kroger's guidance will reveal whether they're running a grocery chain or a hope factory. Bonus cynicism: If EPS misses, expect the obligatory 'strategic investments' euphemism.

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However, revenues are expected to decline by 0.2% from the year-ago quarter to $45.16 billion, according to data from the TipRanks Forecast page. It’s important to note that Kroger has outperformed EPS estimates in all of the past nine quarters.

Analysts’ Views Ahead of Kroger’s Q1 Print

Ahead of the Q1 report, Citi analyst Paul Lejuez has maintained a Neutral rating and a $65 price target on Kroger stock. Lejuez expects Kroger to deliver solid results for the first quarter, with estimated earnings per share of $1.47, slightly above the Street’s forecast of $1.46. Same-store sales are also expected to come in a bit stronger than expected, rising 2.5% versus the 2.4% consensus. Looking ahead, he believes that Kroger will likely stick to its full-year forecast, given the uncertain economy and rising competition from rivals like Walmart (WMT).

Overall, the analyst thinks Kroger is in a good spot for now because of lower tariff risks. But over time, it may face tough competition from Walmart’s low prices and strong online shopping options.

Options Traders Anticipate a Minor Move

Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings MOVE is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.

Indeed, it currently says that options traders are expecting a 4.62% move in either direction.

Is Kroger Stock a Good Buy?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on Kroger stock based on six Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average Kroger price target of $72.55 per share implies 10.73% upside potential.