Kroger reports strong Q2 results as digital sales more than double
Dive Brief:
Kroger’s business grew at a brisk pace in the second quarter as the grocer continued to benefit from the heightened focus on eating at home caused by the pandemic. The company’s sales hit $30.5 billion for the three-month period that ended Aug. 15, an 8% year-over-year increase, while comparable-store sales growth came in at 14.6%, down from the 19% level Kroger reported in the first quarter. Operating profit fell to $820 million after exceeding $1.3 billion in the first quarter.
Digital sales rose 127% in Q2 as Kroger capitalized on sustained interest by consumers in ordering groceries online. Digital orders became profitable during the quarter on an incremental basis, Chief Financial Officer Gary Millerchip said during Friday morning's earnings call, as demand and advertising revenue outpaced the company's cost to fulfill.
Kroger expects to post an identical store sales gain for the full year of at least 13%, and predicts earnings per share, a key indicator of profitability, will rise between 45% and 50%. Kroger also said it expects that the robust results it has seen because of the pandemic will carry over to 2021.
Dive Insight:
Kroger is continuing to reap the rewards that come from running thousands of grocery stores at a time when eating out remains decidedly out of favor across the nation. However, the grocer’s latest financial report indicates that the impact of the pandemic on its business has begun to moderate.
