Supermarket chain operator Kroger lowered its full-year sales forecast amid shoppers becoming more selective in their choice of groceries, fresh fruits and vegetables and more focused on in-store promotions and sales, Reuters points out.
The company's shares were down nearly 7% in trading on Dec. 4; they have added about 1% since the beginning of the year.
Details
Kroger reported results for the third quarter of 2025.- According to LSEG, Kroger's sales excluding fuel increased 2.6% in the third quarter, compared to the 2.91% increase expected by analysts.
- Adjusted earnings per share came in at $1.05, which was higher than the $1.03 forecast, Reuters writes.
- Comparable sales in 2025, excluding fuel, will grow 2.8-3%, according to the retailer's updated forecasts. Those numbers are below the average of 3.14%, Reuters noted. In September, the company expected the figure to rise in the range of 2.7-3.4%.
What's putting pressure on the company?
Kroger is under pressure as low-income shoppers cut back on spending and switch to cheaper items amid cuts to food stamps, Reuters notes. They were temporarily suspended on Nov. 1 due to the federal government shutdown, hitting family budgets even harder.
According to Jefferies analysts, about 10% of all purchases in the U.S. paid for with food stamps are at Kroger, the second largest after Walmart. About 6% of Kroger's total sales are generated by such transactions, analysts say.
Also, the agency notes, competition has intensified in the market, with larger players such as Walmart and Target cutting prices to attract shoppers. Kroger, too, has cut prices on 3,500 items, including fresh produce and meat, to retain savings-oriented shoppers.
The company's stock fell on Dec. 4 after Kroger's acting CEO Ron Sargent said middle-income shoppers now face the same burden as low-income families.
What are the analysts saying?
Last week, on November 26, JPMorgan lowered its target price on shares of Kroger from $75 to $73, keeping its neutral rating. Its target assumes growth of retailer's securities by 10.6%.
Of the 25 analysts who track the company's stock, 14 advise holding it in a portfolio, while the other 11 recommend buying it.
This article was AI-translated and verified by a human editor
