- Credit Suisse (SIX:CSGN) posts an earnings preview on Kroger (NYSE:KR) ahead of the company's earnings report due out tomorrow.
- "We believe the Q3 earnings print has been somewhat de-risked as management also took down ID sales guidance for the back half of 2018 (to be similar to first half results)," writes the CS analyst team.
- "Investor attention will likely focus on Q4-to-date trends as remodel activity has now flipped from a headwind to a tailwind, updates on the inflation/competitive outlooks, and incremental commentary around 2019 operating income growth. Management commentary, in late October, indicated that EBIT should grow by a 'decent' amount in 2019, whereas consensus embeds just ~2.5% growth. Any update on digital sales growth and alternative profit stream progress will be of interest as well."
- The firm rides into Kroger's earnings day with an Outperform rating on the grocery stock and price target of $32 (+11% upside). Shares of Kroger fell 3.76% yesterday amid a broad market downturn.
- Consensus estimates on Kroger for Q3: Revenue $28.7B, EPS $0.43, identical-store sales growth (ex-fuel) +1.7%, gross margin rate 22%.
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