Kroger's Strong Q1 Results, Forecast Raise Allay Recession Fears

Kroger Co (KR) topped first-quarter expectations and raised its full-year revenue outlook on Friday, lifting shares and retail sentiment. The strong showing from America's largest grocery chain eased recession fears and signaled that consumer spending on essentials remains resilient.

Shares gained 9.8% to $71.97 on Friday, their best intraday performance in over a year. 

On Stocktwits, the retail sentiment climbed higher in the 'extremely bullish' territory as of late Sunday, compared to a week ago, while message volume was 'extremely high.'

One user posted, "Recession, what recession?" Several users posted positive comments about the stock, with one saying they expect levels to be around $75 in the near term.

Kroger raised its full-year 2025 identical sales growth target to 2.25% to 3.25%, from 2% to 3%, while keeping the profit outlook unchanged.

The raise follows a strong first quarter. Comparable sales rose 3.2%, higher than the 2.4% estimate from LSEG/Reuters. Quarterly earnings per share of $1.49 also topped estimates by 3 cents.

"Kroger delivered solid first quarter results, with strong sales led by pharmacy, eCommerce and fresh," CEO Ron Sargent said in a statement.

On the analyst call, CFO David Kennerley said that Kroger has seen an improvement in grocery volumes in recent quarters, contributing to growth in the latest quarter.

Kroger expects further volume expansion over the rest of 2025.

Executives said the company has slashed prices on more than 2,000 products this year and will offer more promotions and coupons.

The company also booked a $100 million impairment charge related to a plan to close about 60 stores.

Year-to-date, Kroger’s stock is up 17.7%.

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