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Kroger’s Earnings Miss Big; How Much CMBS Debt is Backed by the Retailer?

June 19, 2017

Kroger’s Earnings Miss Big; How Much CMBS Debt is Backed by the Retailer?

June 15, 2017 | by Manus Clancy | Trepp.com

As we noted earlier this week, grocery chain Kroger (NYSE:KR) announced its latest set of earnings today. The market consensus was that the numbers and subsequent guidance would be considered a benchmark for just how much pressure grocers in general have come under recently.

The Wall Street Journal recently noted that foreign grocery chains Aldi and Lidl are ramping up their presence in the US with cheaper inventory and smaller stores. This comes at the same time that Walmart and delivery services like Blue Apron have taken aim at the traditional players. The last time Kroger reported earnings, it said sales comps were down for the first time in over a decade.

The earnings arrived before the market open on Thursday, and the results were underwhelming. Kroger announced that it expects profits to come in between $2.00 to $2.05 per share (on an adjusted basis) this year, which is well below the prior guidance of $2.21 to $2.25. The firm’s earnings missed the consensus estimates of $2.22. The one bright spot was that sales comps were down only 0.2%, which, according to The Financial Times, indicates the rate of decline seems to be tapering. Kroger’s stock price was down almost 10% before the opening bell, but that worsened to an 18% drop by mid-morning.

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