Shares of Kroger (NYSE:KR) are racing 10.3% higher as of 10:56 a.m. ET on Thursday after the supermarket chain reported strong third-quarter earnings and raised its full-year outlook.
While inflation has made even produce pricier, cooking at home is still a more affordable option than dining out, and the grocery store operator is expecting dining in to remain on the menu for consumers.
Kroger third-quarter sales topped $31.9 billion. Excluding fuel sales from the equation, that amounts to a 2.9% gain from last year and beats analyst estimates of $31.2 billion. Adjusted earnings of $0.78 per share also trounced Wall Street expectations of $0.66 per share.
What really enthused the market, though, was the outlook for the rest of the year. Kroger said it now expects revenue compared to 2019 to be 13.7% to 13.9% higher, with adjusted net earnings to be in the range of $3.40 to $3.50 per share. That's a big step up from its previous outlook of $3.25 to $3.35 per share.
Chairman and CEO Rodney McMullen said, "Our agility, and the commitment from our amazing associates, is allowing us to navigate current labor and supply chain conditions and provide the freshest food at affordable prices across our store and digital ecosystem."
Inflation is hitting consumer pocketbooks hard, forcing them to economize. While that doesn't bode well for the restaurant and hospitality industries, supermarkets like Kroger will benefit from the stay-at-home ethos that was developed during the pandemic.