Kroger shares drop 8% on Q1 in-line results, 19% e-commerce growth
KR•Kroger shares fell over 8% after first-quarter results that matched expectations and reaffirmed full-year guidance, with identical sales excluding fuel up 1% led by e-commerce, fresh products and private-label brands. E-commerce sales rose 19% and cost savings exceeded internal plans by about 30%, though planned investments and savings were not quantified.
1. Q1 Results and Stock Reaction
Kroger delivered first-quarter earnings in line with expectations and reaffirmed its full-year outlook, but shares closed down over 8% as investors sought more detailed visibility on strategic plans.
2. Sales Performance
Identical sales excluding fuel increased 1%, led by a 19% jump in e-commerce, along with growth in fresh products and private-label brands, while grocery volumes remained negative but improved year over year.
3. Cost Savings and Investments
Kroger exceeded internal cost-savings targets by roughly 30%, finding opportunities in merchandise costs and non-resale expenses, and stated that planned price and value investments will be fully funded by these savings.
4. Strategic Outlook
Under CEO Greg Foran, Kroger aims to narrow its price gap with competitors, simplify promotions and accelerate operating culture changes, with detailed metrics on savings and investments to be shared at the Oct. 20 investor day.
