KR - Embedded Expectations Analysis - 2021 07 15
The Kroger Co. (KR:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 26.3x Uniform P/E. At these levels, the market is pricing in expectations for profitability to remain stable, and management is excited about their digital advertising, and confident about produce and natural foods consumption as well as customer shopping trends.Specifically, management generated an excitement marker when saying they can offer a more efficient digital advertising model for partners. In addition, they are confident produce and natural foods consumption expanded, that retail media is the fastest-growing media channel, and that their cents per gallon fuel margin improved from last year. Furthermore, they are confident their overall associate benefits package strives to be relevant in today's market and they understand the ways in which customer behavior trends are changing.
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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