Undervalued, Citi Research expects Kroger Co (NYSE:KR). to post slightly better-than-expected first-quarter results

Citi Research expects Kroger Co (NYSE:KR). to post slightly better-than-expected first-quarter results, with estimated earnings per share of $1.47 compared to the FactSet consensus of $1.45. Comparable sales are projected to increase 2.5%, narrowly ahead of the 2.4% consensus.

Total sales for the quarter are forecast at $45.2 billion, flat year over year, versus a -1.4% decline in the prior quarter.

Gross profit is estimated at $10.29 billion with a 22.7% margin. Selling, general and administrative expenses are expected to rise 1.4% to $8.80 billion. Operating income is projected at $1.49 billion, maintaining a 3.3% margin.

Foot traffic rose slightly in the first quarter to +0.1%, up from -0.1% in the fourth quarter, according to Citi’s traffic tracker.

For the second quarter to date, traffic is tracking at +0.6%. Citi’s credit card data shows a -1.0% year-over-year decline in spending in the food retail category during the first quarter, slightly worse than the -0.9% drop in the previous period.

Spending in the category is down -2.6% quarter-to-date in the second quarter, indicating a slowdown.

Citi maintains its full-year fiscal 2025 EPS estimate at $4.86, above the consensus forecast of $4.74.

The brokerage’s full-year comp sales estimate remains at +2.8%, compared to consensus at +2.6%.

Kroger is expected to reaffirm its fiscal 2025 guidance for comparable sales growth between 2.0% and 3.0% and EPS guidance in the $4.60–4.80 range.

Despite modest strength in core metrics, Citi analysts noted competitive risks. Retailers such as Walmart (NYSE: WMT) and dollar stores continue to gain market share among higher-income consumers. Analysts said they will watch closely for any signs Kroger is losing share as shoppers shift toward perceived value.

Kroger previously indicated a strategic shift toward offering more upfront value, reducing reliance on couponing and promotional tactics.