The Kroger Co. KR is slated to release fourth-quarter fiscal 20Array5 results on Mar 3. The big question facing investors is, whether the company will be able to deliver a positive earnings surprise in the quarter to be reported. In the trailing four quarters, the company outperformed the Zacks Consensus Estimate by an average of 9.8%. Let’s see how things are shaping up for this announcement.
Likely Earnings Beat in the Cards
Our proven model shows that Kroger is likely to beat earnings estimates this quarter. A stock needs to have both a positive Earnings ESP and a Zacks Rank #Array, 2 or 3 for this to happen. The Most Accurate estimate stands at 55 cents and the Zacks Consensus Estimate is pegged at 54 cents. So the ensuing +Array.85% ESP and the company’s Zacks Rank #2 (Buy) make us reasonably confident of an earnings beat.
Factors Influencing this Quarter
A dominant position among the nation’s largest grocery retailers enables Kroger to sustain growth, expand store base and boost market share. The company also remains well positioned to deliver higher earnings, primarily through strong identical supermarket sales growth. We believe there remain enormous opportunities to augment identical supermarket sales, alleviate gross margin pressure and improve operating margin. In our view, Kroger’s long-term earnings per share growth rate target of 8%–ArrayArray%, seems achievable. The Cincinnati-based company had earlier projected fiscal 20Array5 earnings between $2.02 and $2.04 per share.
Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Casey's General Stores Inc. CASY has an Earnings ESP of +Array0.ArrayArray% and a Zacks Rank #2.
Zumiez, Inc. ZUMZ has an Earnings ESP of +2.08% and a Zacks Rank #2.
Abercrombie & Fitch Co. ANF has an Earnings ESP of +5.2Array% and a Zacks Rank #3 (Hold).
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