Kroger shares dropped 8.4% on June 18 after new CEO Greg Foran acknowledged that operating costs are growing faster than sales and deferred details of a planned price-reinvestment strategy to an investor update on October 20. First-quarter identical sales rose 1.0% and online sales grew 19%, while the eCommerce unit including Kroger Precision Marketing turned profitable. The company also reported cost of goods savings that were 30% ahead of plan. However, analysts from Citi, Morgan Stanley, and Wells Fargo trimmed price targets, and the stock has since drifted to around $58, near its 52-week low, as investors await concrete evidence that the self-funded turnaround can stabilize margins.
Kroger CompanyCEO admits cost growth exceeds sales growth, leading to analyst downgrades and stock drop.
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