By Mackenzie Tatananni

Kroger reported fiscal first-quarter revenue that narrowly missed Wall Street expectations and the grocer maintained its overall fiscal-year guidance against an "uncertain" macro backdrop.

Adjusted earnings of $1.49 a share topped the consensus estimate of $1.45 among analysts polled by FactSet. While identical sales without fuel continued to grow, rising 3.2% from the prior year, total sales of $45.12 billion failed to beat Wall Street calls for $45.16 billion.

The company reaffirmed its fiscal-year outlook, save for an update to identical sales without fuel. The company said it now expects growth in the range of 2.25% to 3.25%, up from a prior range of 2% to 3%.

The guidance hike comes on the heels of "strong sales results and positive momentum," Chief Financial Officer David Kennerley said. While first-quarter profitability exceeded management's expectations, "the macroeconomic environment remains uncertain and as a result other elements of our guidance remain unchanged," he added.

The company noted an impairment charge of $100 million related to the planned closing of around 60 stores over the next 18 months. This change is expected to have a "modest financial benefit" and won't impact guidance, management said.

The stock was up 0.7% at $65.70 in premarket trading Friday. Futures tracking the benchmark S&P 500 were up 0.3%.

While shares rose after the company reported a mixed fourth quarter in March, it hasn't been smooth sailing for Kroger as of late. Former CEO Rodney McMullen resigned in March following an investigation into his "personal conduct." The company has also grappled with macroeconomic pressures and the bungled acquisition of rival supermarket chain Albertsons.

Kroger said last quarter that it was working to mitigate the impact of tariffs on customers. Management asserted at the time that the chain faced a relatively small effect from the levies, mostly impacting its fresh produce department. The company didn't directly acknowledge tariffs in its first-quarter earnings release.

Kroger agreed to buy Albertsons for $24.6 billion in 2022, but those plans were blocked on antitrust concerns last year. The companies are now facing off in court, with Albertsons asserting that Kroger didn't do enough to secure regulatory approval and Kroger countersuing for an alleged breach of the merger agreement.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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June 20, 2025 08:50 ET (12:50 GMT)

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