U.S. supermarket chain Kroger Co KR.N on Friday forecast full-year same-store sales and profit above Wall Street expectations, as consumers eat more at home with offices closed and schools shifting classes online due to the COVID-19 pandemic.
Shoppers have been ordering everything from fresh vegetables and canned soups online since the outbreak, driving a 127% surge in digital sales at Kroger in the second-quarter ended Aug. 15.
The company had been investing heavily to expand its digital offerings even before the health crisis, from testing driverless-delivery technology in three Texas stores and making a big investment in British online supermarket Ocado Group.
“As we talk to other companies across America, we believe return to work will look very different, with many employees working part of the week from home,” Chief Executive Officer Rodney McMullen told analysts on a call.
“2021 will be even stronger than we previously anticipated,” he added.
The company, among the first retailers to give a forecast, said it expects 2020 comparable sales to exceed 13% and earnings of between $3.20 and $3.30 per share.
Analysts were expecting comparable sales of 10.15% and earnings of $2.90 per share, according to IBES data from Refinitiv.
Still, some analysts said the unprecedented growth seen during the lockdowns would not last.
“Bears rightly point out that the 19% ID (same-store) sales and profit surge from 1Q was the top, with the reality that recent growth rates are unsustainable,” said Evercore ISI analyst Michael Montani.
On an adjusted basis, Kroger earned 73 cents per share, beating estimates of 55 cents. Comparable sales jumped 14.6%, topping expectation of 10.96%.
Kroger’s shares were last up marginally at $34.86 in midday trading. They have gained about 20% so far this year.