Kroger Co raised its annual profit forecast on Thursday, although the U.S. supermarket chain missed expectations for quarterly sales as its coronavirus-driven online growth slowed due to an easing in restrictions in the second half of the year.
Still, Kroger’s online sales more than doubled in the third quarter ended Nov. 7, but was lower than the 127% surge it recorded in the preceding quarter.
“As you look to 2021, we expect, obviously, the digital growth won’t be as much as it was in 2020,” Chief Executive William McMullen told analysts.
However, a spike in coronavirus cases has led to a pick up in sales in recent weeks, prompting the retailer to reimpose a purchase limit on certain essential products.
“Bears rightly point out that recent growth rates are unsustainable,” Evercore analyst Michael Montani said.
Kroger expects adjusted per-share profit of $3.30 to $3.35 in 2020, compared with its prior range of $3.20 to $3.30 and Refinitiv IBES estimate of $3.30.
It also expects same-store sales, excluding fuel, to rise around 14%, compared with its prior view of a more than 13% growth and estimate of a 13.08% rise.
Third-quarter same-store sales, excluding fuel, rose 10.9%, beating estimates. Sales including fuel, however, rose 6.3% to $29.72 billion, missing $29.97 billion estimate.
Excluding items, Kroger earned 71 cents per share, beating 67 cents estimate.
The company’s shares, up about 11% so far this year, were down 4% in morning trading.
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