KR - Embedded Expectations Analysis - 2020 10 09
The Kroger Co. (KR:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 20.8x Uniform P/E. At these levels, the market has expectations for profitability to remain muted, but management is confident about EPS growth, the customer experience, and their ability to meet cost savings guidanceSpecifically, management is confident in their ability to deliver adjusted EPS growth, meet their $1 billion cost savings guidance, and invest in supporting their customers. In addition, they are confident they have a seamless and great customer experience, that personalization and data continue to be Kroger's key competitive moats, and that their data and technology are adjusting to changing pickup times. Moreover, management is confident in the performance of their alternative profit streams and in the trends developing in markets. Furthermore, they are confident they are investing to ensure a safe environment for associates and customers and that they remain well-positioned in their markets due to their fuel procurement and reward program
Kroger operates as a retailer. The company also manufacture and process some of the food for sale in its supermarkets. Supermarkets are operated under one of the following formats: combination food and drug stores (combo stores); multi-department stores; marketplace stores; or price impact warehouses. The combo stores provide food and organic sections, pharmacies, general merchandise, pet centers and perishables such as seafood and organic produce. Marketplace provide grocery, pharmacy and health and beauty care departments as well as perishable offering and general merchandise area that includes apparel, home goods and toys.
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