(Reuters) – Kroger Co said it expects to exceed its 2020 outlook for same-store sales and profit after beating Wall Street expectations for quarterly results on Thursday, as the U.S. supermarket chain benefited from consumers stocking up on essentials during the coronavirus lockdowns.
Demand for groceries, including produce, meat and soups, has seen an unprecedented surge in recent months, as concerns about the length of stay-at-home orders had forced shoppers to stock up, with most restaurants also shutting dine-in areas or offering a limited menu.
Kroger even put purchase limits on select products, including cold, flu and sanitary products, ground beef, and fresh pork, at some of its stores at the height of virus-led stockpiling.
The company, however, did not reaffirm or provide new 2020 forecast. It had previously projected same-store sales to increase more than 2.25%, while it expected to earn between $2.30 to $2.40 per share.
“The COVID-19 pandemic has dramatically changed the outlook for food retail in 2020 … There are still many unknown factors related to the long-term impact of COVID-19,” Chief Financial Officer Gary Millerchip said.
Digital sales for the quarter skyrocketed 92%, compared with the previous quarter’s 22% increase.
Sales rose 11.5% to $41.55 billion, well above the average estimate of $40.72 billion. Excluding the impact of fuel prices, sales at stores open for more than a year rose 19% in the first quarter ended May 23.
Net earnings attributable to Kroger rose 57% to $1.21 billion, or $1.52 per share. Excluding one-time items, Kroger earned $1.22 per share, beating market estimates of $1.09.
Reporting by Praveen Paramasivam in Bengaluru; Editing by Subhranshu Sahu.