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The Kroger Co. (KR - Free Report) is likely to register a top-line increase when it reports third-quarter fiscal 2024 results on Dec. 5. The Zacks Consensus Estimate for revenues is pegged at $34,295 million, indicating an increase of 1% from the prior-year reported figure.

The bottom line is also expected to improve year over year. In the past 30 days, the Zacks Consensus Estimate for third-quarter earnings per share has been unchanged at 98 cents. The consensus figure implies a rise of 3.2% from the prior-year quarter.

The company has a trailing four-quarter earnings surprise of 8.2%, on average. In the last reported quarter, the bottom line surpassed the Zacks Consensus Estimate by 1.1%.

The Kroger Co. Price, Consensus and EPS Surprise

The Kroger Co. price-consensus-eps-surprise-chart | The Kroger Co. Quote

Factors Shaping Kroger’s Upcoming Earnings

Kroger continues to capitalize on its core strengths by offering a broad assortment of fresh products, expanding the company’s ‘Our Brands’ portfolio, delivering personalized shopping experiences and maintaining a seamless digital ecosystem. These strategic initiatives not only enhance customer satisfaction but also strengthen Kroger's competitive position in the retail market. This focused approach has likely contributed to the company’s solid performance in the third quarter, enabling it to maintain momentum in a tough retail environment.

Looking into the second half of the year, Kroger remains cautiously optimistic about its sales outlook. The company expects customers to prioritize food and essential items, which aligns with its strategic focus. 

The Zacks Consensus Estimate for total sales to retail customers, excluding fuel, is pegged at $30,080 million, indicating a 1.7% year-over-year increase. The consensus estimate for identical sales without fuel is expected to grow 1.8%. However, supermarket fuel sales are anticipated to decline 8.4% year over year to $3,760 million, while the consensus mark for other sales is $284 million, up from $272 million in the prior year.

Kroger’s digital business continues to act as a significant growth driver, supported by initiatives such as the Delivery Now program, the Boost membership program and the expansion of customer fulfillment centers. Additionally, its alternative profit ventures, including Kroger Precision Marketing, are likely to have contributed to incremental growth.

Nevertheless, margins remain an area of concern, particularly with potential risks arising from deleverage in operating, general and administrative expenses. Monitoring these dynamics will be crucial to know how Kroger navigated the quarter.

What the Zacks Model Predicts for KR

Our proven model does not conclusively predict an earnings beat for Kroger this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that’s not the case here.

Kroger has a Zacks Rank #3 but an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

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