The Kroger Co. KR is likely to register decreases in the top and bottom lines when it reports fourth-quarter fiscal 2024 results on March 6. The Zacks Consensus Estimate for revenues is pegged at $34,594 million, indicating a decline of 6.7% from the prior-year reported figure.

The consensus mark for the bottom line has increased a penny in the past seven days and is pegged at $1.10. The consensus figure implies a decline of 17.9% from the prior-year quarter. The company delivered a trailing four-quarter earnings surprise of 6.8%, on average. In the last reported quarter, the bottom line was in line with the Zacks Consensus Estimate.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Things to Know Before KR’s Q4 Earnings

Kroger continues to navigate a challenging operating environment, shaped by tightening consumer spending and stiff competition. Budget-conscious households remain under pressure due to multiyear inflation and higher interest rates, which might have impacted Kroger’s sales and customer behavior in the fourth quarter.

The company has been grappling with rising operating, general and administrative (OG&A) expenses. In the third quarter, the OG&A rate, excluding fuel and adjustment items, increased 22 basis points, caused by higher incentive plan expenses and the divestiture of Kroger Specialty Pharmacy. Any deleverage in OG&A could weigh on profitability.

The Zacks Consensus Estimate for total retail sales, excluding fuel, is pinned at $30,895 million, indicating a 7.3% year-over-year decline. Identical sales without fuel are predicted to grow 1.8%, which shows a deceleration from 2.3% increase registered in the preceding quarter. The consensus mark indicates supermarket fuel sales to fall 4.2% year over year to $3,323 million. Meanwhile, the consensus estimate for other sales is pegged at $293 million, up from $285 million in the prior year.

Despite challenges, Kroger’s customer segmentation strategy, emphasis on value-driven offerings and expansion of ‘Our Brands’ portfolio are likely to have helped it maintain a competitive position. The company remains committed to its core strengths, including a diverse fresh product selection, personalized shopping experiences and a seamless digital ecosystem. These strategic endeavors are likely to have played a key role in supporting Kroger’s performance in the fourth quarter.

What the Zacks Model Predicts for KR

Our proven model does not conclusively predict an earnings beat for Kroger this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here.

Kroger has a Zacks Rank #3 and an Earnings ESP of -0.20% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

DICK'S Sporting Goods, Inc. DKS currently has an Earnings ESP of +0.11% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company's top line is anticipated to have decreased year over year when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $3.8 billion, which indicates a 3.3% decrease from the figure reported in the year-ago quarter. 

The company is expected to register a decline in the bottom line. The consensus estimate for DICK'S Sporting Goods’ fourth-quarter earnings is pegged at $3.47 per share, down 9.9% from the year-ago quarter. DKS delivered a trailing four-quarter earnings surprise of 11.4%, on average.

Costco Wholesale Corporation COST currently has an Earnings ESP of +0.14% and a Zacks Rank of 2. The company is likely to register growth in both top and bottom lines when it reports second-quarter fiscal 2025 numbers. The Zacks Consensus Estimate for Costco’s quarterly revenues is pegged at $63.2 billion, which indicates 8.2% growth from the prior-year quarter. 

The Zacks Consensus Estimate for Costco’s quarterly earnings per share is pegged at $4.09, indicating a 10.2% increase from the year-ago period. COST delivered a trailing four-quarter earnings surprise of 2%, on average.

Five Below, Inc. FIVE has an Earnings ESP of +1.45% and a Zacks Rank of 3 at present. FIVE is likely to register top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.4 billion, indicating 2.9% growth from the figure reported in the year-ago quarter. 

The consensus estimate for Five Below’s fiscal fourth-quarter earnings is pegged at $3.35 per share, implying an 8.2% decline from the figure reported in the year-ago quarter. FIVE delivered delivered an average earnings surprise of 39% in the trailing four quarters.

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The Kroger Co. (KR) : Free Stock Analysis Report

Costco Wholesale Corporation (COST) : Free Stock Analysis Report

DICK'S Sporting Goods, Inc. (DKS) : Free Stock Analysis Report

Five Below, Inc. (FIVE) : Free Stock Analysis Report

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