Funny how the market can change its collective mind so quickly. One day, it's risk-seeking and looking for the highest nominal growth it can find. The next day, it becomes risk-averse, and investors start eyeballing companies with less robust, but perhaps more certain, growth. And if that's what's playing out today, it will probably work in favor of a stock like Kroger
It doesn't hurt that Kroger is also making a good case for itself. Revenue in this recent quarter rose more than 8%, with identical sales -- Kroger's version of comps -- up more than 7%, and still up in excess of 5% excluding the sale of gasoline. Heck, Gap
Kroger's performance under the top line, however, wasn't quite so impressive. Gross margins shrank a bit -- though not so much when you exclude fuel -- and operating profits rose just 4% for the quarter. Still, we're talking about a company with really good internal returns, so I'm not going to get too worked up about it.
I also like it that Kroger management does what it says it will do. Company execs talked a while back about improving the competitiveness of their stores -- lowering prices, improving selection, shortening wait times, cleaning the stores more often, and so on. And as someone who shops at Kroger fairly often, I can tell you that they've done exactly that. It makes an interesting contrast, then, to BJ's
There's not a whole lot of growth in this business model, but the growth that's there is pretty consistent -- even in the face of competition from Wal-Mart
This is not a stock that's going to rock your world, but I'm sure that some investors have had more than their fill of "excitement" in the past month or two.
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).