Kroger (KR) Stock Slides Despite Earnings Beat

  • Kroger (KR) stock is falling following the release of its first-quarter earnings report.
  • For the period, Kroger beat EPS and revenue estimates as well as increased its guidance.
  • The company’s margins are behind the drop.
A Kroger (KR Stock) logo on a building.

Source: Jonathan Weiss / Shutterstock.com

Kroger (NYSE:KR) stock is slipping on Thursday despite the release of a positive earnings report for Q1 2022.

That starts with adjusted earnings per share (EPS) of $1.45, which beat out the $1.30 Wall Street had expected for the quarter. It’s also an increase over the $1.19 per share reported by the retailer in Q1 2021.

To go along with this, Kroger reported revenue of $44.6 billion. Yet again, that comes in above the $44.35 billion analysts had expected as well as the $41.3 billion reported in Q1 2021.

In addition to this, Kroger updated its outlook for 2022. The company now expects EPS ranging from $3.85 to $3.95. To put that in perspective, Wall Street is looking for an adjusted EPS of $3.84 for 2022.

All of this seems like good news for KR stock. So why are shares slipping today? Investors will want to look at the company’s margins to understand the current drop. Kroger reported a 26-point decrease for its FIFO Gross Margin Rate during the quarter. Its OG&A Rate also dropped 46 points during the period.

It’s also worth mentioning that KR stock isn’t seeing heavy trading today despite the earnings beat. This has some 4 million shares of the stock changing hands as of this writing. That’s still below its daily average trading volume of about 6.4 million shares.

KR stock is down 1.5% as of Thursday morning.

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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


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