Kroger’s CEO acknowledged a cost crisis as operating expenses grow faster than sales. Management labeled this trend unsustainable and unacceptable following the June 18 first-quarter earnings report.
Kroger shares fell significantly despite the company meeting headline sales growth targets. Investors reacted to underlying operational issues and a lack of immediate guidance from leadership.
Management deferred specific details on a new pricing and cost-cutting strategy until an October investor day. This information vacuum led analysts at several major banks to trim their price targets.
The eCommerce business turned profitable in the most recent quarter. However, the lack of clarity regarding the core turnaround plan continues to weigh on share prices.