(Reuters) -Kroger Co forecast annual profit above Wall Street estimates on Thursday, as the supermarket chain benefits from higher prices, easing cost pressures and steady demand for its groceries and other essentials.
Shares of Kroger, which has inked a $25 billion deal to buy smaller rival Albertsons Companies Inc, climbed about 3% in premarket trading.
Kroger’s upbeat forecast is in contrast to that of retail chains such as Walmart Inc, Target Corp and Dollar Tree Inc, which have all issued downbeat 2023 profit forecasts, as weakening consumer spending on discretionary goods squeeze margins.
Analysts have also said Kroger’s move to use automation across its businesses, coupled with its personal finance and media divisions, should help cushion margins.
Kroger forecast adjusted earnings per share of between $4.45 and $4.60 for fiscal 2023, while analysts on average expected a profit of $4.20 per share, according to Refinitiv IBES data.
Still, the company projected same-store sales growth, excluding fuel, of 1% to 2% in fiscal 2023, below analysts’ estimate of a 2.23% increase.
(Reporting by Deborah Sophia in Bengaluru; Editing by Anil D’Silva)