Shareholders never want to get news that their company is lowering its forward guidance, but Kroger Co KR 0.93% shareholders can at least tell themselves “it could have been worse.” Kroger has officially lowered its fiscal 2016 EPS guidance from $2.19–$2.28 to $2.10–2.20. The move represents about a 3.8 percent reduction.
But Kroger isn’t the only grocer that has been dialing back expectations in recent weeks. Sprouts Farmers Market Inc SFM 2.04% has lowered its Q3 EPS guidance from $0.94 to $0.83–$0.86, a roughly 9.5 percent reduction.SUPERVALU INC. SVU 1.93% management said on September 8 they now expect full-year EBITDA to come in about 5.0 percent below last year’s level.
BMO Capital Markets analyst Kelly Bania believes Kroger’s modest guidance cut is a sign of relative strength among peers.
“Compared to deeper earnings cuts in recent weeks by peers in light of accelerating deflation (KR product cost deflation of 1.25 prcent excluding pharmacy in F2Q17 or <1 percent including pharmacy), KR cut F17 EPS guidance by 2–3 percent at the mid-point with full-year IDs expected to be lower by 1.1–1.7 percent, suggesting minimal GM percentage pressure in our view,” Bania explained.
BMO remains…
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