Kroger's Ready to Face Down Amazon in 2020
Amazon (NASDAQ: AMZN) has been getting more aggressive in its bid to take on traditional grocery stores both online and with physical stores. That's been a major challenge to Kroger (NYSE: KR) and other grocers forced to keep up with the investments Amazon and bigger competitors like Walmart (NYSE: WMT) are making in the grocery space. Investors have rightfully worried about the potential drag on sales and profits for the company.
But at its investor day this week, Kroger forecast adjusted earnings per share of $2.30 to $2.40 in 2020, above analysts' consensus of $2.19 per share. It also expects same-store sales to grow above 2.25%, better than the 1.99% expected from analysts. The news sent the stock price rocketing higher.
Kroger is actually using an Amazon-like approach to take on its competitors next year. It's focusing on the customer to drive sales. This might require some up-front investments, but management expects higher-margin ancillary products to pick up the slack to support the bottom-line results.
Source Fool.com
