Hey Everyone,

Tomorrow I’ll be on TV with Morning Trade Live, Friday September 9th at 9:45am ET with @OJRenick. #MorningTradeLive

Here is a link to the live stream: https://tdameritradenetwork.com/shows/morningtradelive

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It’s going to be an early morning for everyone on the West Coast.

We will be sharing our latest research on KR the Kroger Company, with some timely takeaways right before they report Q2 earnings tomorrow at 10:00am ET.

Here is an inside view on what we will be sharing:

KR

Recommend: Hold

Leading American grocer, with 2,726 supermarkets operating under several banners throughout the country as of the end of fiscal 2021.

The company has a strong fundamental score:

• Positive revenue growth

• Expect continued EPS growth

• High shareholder returns +23% 5-Year Avg. ROE

3 Big Questions for Management:

1. Is inflation holding Kroger this quarter?

KR is up 11.6% year-to-date as of Sep 8. We are expecting sales performance to keep pace with inflation as they do not experience seasonally in general. We expect food pricing will continue to stay high with the ability to push prices onto consumers. At this point we don't expect sales to be impacted significantly.

2. How is Kroger’s Paid Membership Plan Performing?

Kroger’s pulling a page out of Sam’s Club and Costco with the launch of their new membership program. The offer is two annual membership levels at $59 or $99, and the new service provides free next-day delivery or free delivery in as little as two hours on orders of $35 or more. Kroger estimates that the membership can save customers more than $1,000 per year on fuel and grocery delivery. What isn’t clear is how this program growth will drive the bottom line.

3. What are they guiding to earn in Q2 and beyond?

Management has already raised the full-year guidance on the back of strong first-quarter results and continued food-at-home trends. The company has a history of upside surprises during earnings season by managing costs efficiently. Kroger is on track to witness $1 billion in cost savings this year for the fifth straight year, and we expect earnings guidance to remain strong.

Thank you for reading and I am grateful and humbled to be able to learn, grow and invest alongside you at Tuttle Ventures. Vision, Courage and Patience leads to successful investing.

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Check out the website or some other work here. 

Important Disclosures Here

Best,

Darin Tuttle, CFA

NOTE - This is not investment advice. Do your own due diligence. I make no representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information contained in this report. Any assumptions, opinions and estimates expressed in this report constitute my judgment as of the date thereof and is subject to change without notice. Any projections contained in the report are based on a number of assumptions as to market conditions. There is no guarantee that projected outcomes will be achieved. Unless there is a signed Investment Management or Financial Planning Agreement by both parties, Tuttle Ventures is not acting as your financial advisor or in any fiduciary capacity.