Kroger Sees Q1 Sales Gain, Raises Outlook
Kroger reported gains in first-quarter identical sales as the grocer raised its forecast for future same-store sales growth.
For the quarter ended May 24, total company sales were $45.1 billion compared with $45.3 billion for the same period last year. This included $917 million from Kroger Specialty Pharmacy sales. Excluding fuel, Kroger Specialty Pharmacy, and adjustment items, sales increased 3.7% compared with the same period last year.
In March of 2024, Kroger sold its specialty pharmacy business to CarelonRx, a subsidiary of Elevance Health. Kroger Specialty Pharmacy is separate from other Kroger Family of Pharmacies, including in-store retail pharmacies and The Little Clinics, which were not included in the sale.
"Kroger delivered solid first-quarter results, with strong sales led by pharmacy, e-commerce, and fresh," said Ron Sargent, chairman and CEO of Kroger. "We made good progress in streamlining our priorities, enhancing customer focus, and running great stores to improve the shopping experience. Our commitment to driving growth in our core business and moving with speed positions us well for the future. We are confident in our ability to build on our momentum, deliver value for customers, invest in associates, and generate attractive returns for shareholders."
In the first quarter, Kroger recognized an impairment charge of $100 million related to the planned closing of approximately 60 stores over the next 18 months. As a result of these store closures, Kroger expects a modest financial benefit.
Kroger Chief Financial Officer David Kennerley said the company’s first-quarter results led the grocer to raise its identical sales guidance to a new range of 2.25% to 3.25%.
“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,” he said. “We continue to believe that our strategy focusing on fresh, Our Brands and e-commerce will continue to resonate with customers and our resilient model positions us well to navigate the current environment."
