Kroger (NYSE:KR) stock has run ahead of the market for most of 2020 as sales spiked thanks to COVID-19 demand shifts. But that gap has narrowed in recent months. Investors are worried that the good times for Kroger could be ending soon, pushing sales growth closer to the industry-lagging 2% rate that the supermarket chain was posting before the pandemic struck.

Its upcoming earnings report won't quell that concern, but it will show whether Kroger is seeing positive momentum heading into the holiday shopping season.

Let's take a closer look at the report set for Thursday, Dec. 3.

An employee restocks fresh produce in a supermarket

Image source: Getty Images.

1. Growth updates

Kroger gave investors some good reasons to celebrate last quarter when it revealed robust sales gains and surging earnings. Volume growth hardly slowed between fiscal Q1 and fiscal Q2 despite the reopening of many restaurant chains. Management noted in September that its 15% comp sales spike in the second quarter likely translated into market share gains.

We'll find out this week whether Kroger is still winning share in a booming industry. Walmart, its biggest competitor, just announced a 6.4% domestic comp sales increase for Q3, marking a slowdown from the prior quarter's 9.3% spike. The retailing titan said its grocery sales in the U.S. were up in the mid-single digits. That's about where Kroger's gains will likely land this week.

If Kroger did win more share over the last few months, look for management to credit their popular in-store brands like Simple Truth. The retailer's wide product offering, which ranges from value-focused merchandise to upscale brands, is also a key competitive advantage.

2. Controlling those costs

Kroger can't control the pace of the grocery industry's growth slowdown, but it has plenty of influence over its spending patterns. A healthy gross profit margin and falling expenses helped produce surging cash flow and earnings last quarter.

KR Operating Income (TTM) Chart

Kroger Operating Income (TTM), data by YCharts.

Investors would be thrilled to see more progress in these areas on Wednesday so that adjusted earnings continue spiking. On average, analysts who follow the stock are looking for reported profits to land at $0.66 per share: up from $0.47 per share a year ago.

3. Looking ahead

Kroger's last official fiscal 2020 outlook was positive, but it came with some major caveats that will be cleared up this week. CEO Rodney McMullen and his team predicted in September that adjusted comp sales gains would exceed 13% for the full fiscal year, while adjusted earnings would rise by nearly 50%.

Management warned that this forecast reflected an unusually wide range of possibilities since consumer spending has been shifting quickly during the pandemic. It wasn't clear at the time how additional outbreaks might affect customer traffic or how shopping patterns would adjust to the withdrawal of federal financial stimulus.

Kroger will have three more months of updated sales trends to review as it makes its final regular forecast for fiscal 2020. It's possible that this outlook might strike investors as conservative, but it's more likely that Kroger modestly boosts its sales growth and earnings guidance following another quarter of elevated demand.

From there, shareholders' attention will turn to how well the chain can execute over the holiday shopping season before kicking off a new fiscal year at the end of January.