Kroger Expected to Post 4Q Sales Decline; New Leadership Brings Questions -- Earnings Preview

As Kroger (KR) prepares to report its fourth-quarter earnings on March 6, investors are bracing for a decline in sales and grappling with the implications of recent leadership changes. The supermarket chain is expected to post quarterly earnings of $1.09 per share, representing a year-over-year change of -18.7%, and revenues of $34.62 billion, down 6.6% from the year-ago quarter.

The consensus EPS estimate for the quarter has been revised 0.33% lower over the last 30 days, suggesting that analysts have become more bearish on the company's earnings prospects. The Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.43%. The stock currently carries a Zacks Rank of #3, making it difficult to conclusively predict that Kroger will beat the consensus EPS estimate.

Kroger's earnings surprise history also offers some insight into its upcoming earnings report. Over the last four quarters, the company has beaten consensus EPS estimates three times. However, the company's recent performance has been mixed, with the stock trading around $62.79 after a 2.9% gain during the quarter.

The recent departure of Rodney McMullen, the long-time CEO and Chairman, has raised questions about the company's strategic direction and earnings performance in the long term. McMullen led the grocery chain since 2014 and was instrumental in implementing the company's "Restock Kroger" initiative, which aimed to transform the business by focusing on digital growth, data analytics, and private label products. His departure could lead to a shift in the company's strategic direction, as the new leadership may have different priorities and visions for the company's future.

Investors will be closely watching the company's earnings call to gain insights into the new leadership's plans for the company and their outlook for the coming year. The new CEO, Ronald Sargent, will need to address the company's recent performance and outline his vision for the future.

In conclusion, Kroger is expected to post a decline in sales and earnings in the fourth quarter, and investors are grappling with the implications of recent leadership changes. The company's earnings surprise history offers some insight into its upcoming earnings report, but the new leadership's plans and outlook will be crucial in determining the company's future performance. Investors should pay close attention to the company's earnings call and other developments to make informed decisions about the stock.