Yahoo Finance Kroger earnings top estimates, stock fluctuates
Yahoo Finance Live anchors discuss third-quarter earnings for Kroger.
Video Transcript
JULIE HYMAN: Let's talk about some more earnings movers. We've got Kroger, which is trading higher about 2%. The supermarket chain beating earnings expectations on the top and bottom lines for the third quarter. Same store sales up 6.9%, and Kroger also raised its guidance here. So all of that benefiting.
The company admits to also its quest to get approval to buy Albertsons for $24.6 billion. We talked a little bit about that earlier in the week that the companies are trying to get that approval and have not yet gotten it. So didn't have a chance to check out the conference call from Kroger, but I'm sure that that is a topic that also came up.
BRAD SMITH: Yeah, and the big argument there that they're going to try and make is, hey, we're going up against Walmart. We're going up against Amazon on the digital landscape and with the key acquisition that they made of Whole Foods back in 2017.
And so, for Kroger and Albertsons, it is still trying to sell at least to regulators who are necessary in order for this deal to fully be consummated and go through, is that they will not be, in bringing these companies together, will not be creating a worse environment for consumers where prices shoot up because of less competition.
And so we're taking a look at Kroger shares here, at least right now, out of the gate, flat, but to the downside. Some of the other things that they talked about in this quarter, they talked about the growth of their business and particularly how they're going to continue to invest in some of the associates, the communities that they're in, and where this kind of consummation of the deal might move forward, is just in the amount of stores that would then be able to be brought together by a Kroger and Albertsons, too.
And that brings perhaps a larger question of, OK, what is the employee base in totality that you would either need to ramp up? Because this is still a key area where they need to retain employees because of the inventory flowthrough that all of them are going to have to work on. And the inventory was also something else that I just noted very briefly. I thought I copied it over to my notes here, but perhaps that's in another part of-- I copied Dollar General's over, so we'll get to that in a second.
JULIE HYMAN: We'll talk about that in a second.
BRAD SMITH: Yeah.
JULIE HYMAN: Just to follow up on what I was saying on the conference call, it sounds like the company said there are no substantial updates on the Albertsons deal. That's what they said in the call. But they also said they expect to see some moderation in the fourth quarter inflation, which is interesting and maybe not shocking, given that we've seen fuel costs come down, a lot of the grain costs that feed through to food prices, that they've been coming down. So it'll be helpful and encouraging to all of us if that happens.
BRAD SMITH: Yes, and more pick and packers as well. Digital sales, that grew by about 10% over the quarter for Kroger as well. So we'll continue to watch that.
