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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowKroger Co.’s sales surpassed expectations during the latest quarter, a sign that consumers are still spending on groceries and other essentials even amid economic turbulence.
The nation’s largest supermarket operator said its comparable sales, excluding fuel, rose 3.2%—better than what Wall Street analysts were expecting. The company also raised its full-year sales guidance to a range of 2.25% to 3.25%, but reaffirmed the rest of its outlook.
“While first quarter sales and profitability exceeded our expectations, the macroeconomic environment remains uncertain and as a result other elements of our guidance remain unchanged,” Kroger Chief Financial Officer David Kennerley said in a statement.
The Cincinnati-based retailer, which has more than 100 stores in Indiana, said it saw a $100 million impairment charge due to its plans to close about 60 stores nationwide over the next 18 months. It did not specify where the closures would take place.
The shares were little changed in Friday premarket trading in New York. Kroger stock gained 7.2% for the year through Wednesday, outpacing the S&P 500 index.
Kroger and other food retailers tend to be more insulated from macroeconomic disruptions because they sell necessities, and consumers typically curtail spending elsewhere before groceries. The grocer has also said it’s not anticipating a major impact from tariffs because it sources the vast majority of products domestically.
Still, the retailer is facing a range of challenges. Shoppers have been prioritizing value, buying cheaper products or more items on promotion, with some sentiment measures remaining weak. Inflation is back in the spotlight due to President Donald Trump’s tariff policies. And the company is seeking to spur growth after its failed deal with Albertsons Cos. and the loss of its long-tenured chief executive.
Other consumer-facing companies have pointed to difficulties navigating through the unpredictable economy. Walmart Inc., the world’s largest retailer, maintained its full-year sales and profit outlook but opted not to give guidance on income for the ongoing quarter. Target Corp., which relies more on sales of clothes and other general-merchandise goods, cut its sales forecast.
Broadly, food inflation has moderated since hitting a four-decade record in 2022, though there are a handful of areas where prices are going up. Cocoa, coffee, oils and some beef cuts are becoming more expensive, Albertsons CEO Susan Morris said at The Wall Street Journal’s Food Forum this week.
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