Kroger Boosts FY22 Outlook On Solid Q2 Beat; Plans $1B Stock Buyback

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  • Kroger Co KR reported second-quarter FY22 sales growth of 9.2% year-on-year to $34.64 billion, beating the consensus of $34.25 billion.
  • Identical Sales without fuel increased by 5.8%.
  • Adjusted EPS of $0.90 beat the analyst consensus of $0.77.
  • The gross margin was 20.9%, and the FIFO gross margin rate, excluding fuel, increased by 2 basis points Y/Y.
  • Operating, general and administrative expenses rose 6.4% Y/Y to $5.4 billion.
  • The operating margin was 2.8%, and operating income for the quarter rose 13.7% to $954 million.
  • Kroger held $1.1 billion in cash and equivalents as of August 13, 2022. Net cash provided by operating activities year-to-date totaled $2.4 billion.
  • The company had a net total debt of $12.4 billion as of August 13, 2022.
  • Buyback: On September 9th, the company's Board of Directors authorized a new $1 billion share repurchase program.
  • Credit Suisse analyst Robert Moskow maintained a Neutral rating on the shares of Kroger and lowered the price target to $55 from $60.
  • Outlook: Kroger raised the FY22 adjusted EPS outlook to $3.95 - $4.05 (prior outlook $3.85 - $3.95) versus the consensus of $3.96.
  • It expects an FY22 operating profit of $4.6 billion - $4.7 billion (prior view $4.3 billion - $4.4 billion).
  • Price Action: KR shares are trading higher by 2.36% at $49.47 on the last check Friday.
  • Photo Via Company
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