However, Ron Sargent also noted that Kroger was adding new households and growing order volumes with existing consumers who already shop with the grocer.
Kroger (KR) Interim CEO Ron Sargent said that customers are feeling stressed about the economy and are taking steps to save money amid tariff-driven price hikes across the board.
“When you look at the income cohorts, low and middle-income households are really looking for deals. They’re using coupons more. They’re making smaller but more frequent trips and they’re buying more private-label products,” Sargent said on the post-earnings call, adding that these customers are also eating out less.
He added that the higher-income households, who are also concerned about the economy and food prices, are still spending. Retail sentiment on Kroger remained unchanged in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
Shares of Kroger were up 2% during midday trading after the company raised its identical sales expectations to a range of 2.7% to 3.4%, up from the prior forecast of 2.25% to 3.25%.
A user on Stocktwits expects the stock to reach $75 by the end of next month.
Sargent said that Kroger was adding new households and was also growing order volumes with consumers who are already shopping with the grocer. However, CFO David Kennerley noted that the consumer environment remains uncertain. “And whilst we have not yet seen what I would call a sort of consumer sentiment translate necessarily into action, that remains an area that we continue to watch very, very carefully,” he added.
Kroger’s second-quarter total sales were $33.94 billion, compared with Wall Street expectations of $34.15 billion, according to data compiled by Fiscal AI. Its adjusted earnings per share were $1.04, compared with estimates of $1.
Shares of Kroger have risen nearly 12% this year and gained about 24% in the last 12 months.
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