The company showed a 19% earnings per share growth in the fourth quarter, and that matched analysts’ expectations. However, the 2018 profit outlook was lower than expected, driving down its stock.
Could this be artificial?
They saw sales up 2.7% from last year's shared quarter, and there is no strong indication of a shift this year.
Kroger has a balanced approach to using the tax cuts, breaking it into thirds and disseminating it nearly equally between pushing the company forward into a high tech era by optimizing store space, and another third going to the employees--because we can't expect folks to work the store for free. The third...third, ahem-excuse me, is going to, "helping share holders," or possibly dividend payouts. Sure this isn't extremely complicated, but that's the joy and beauty of the way $KR operates.
Speculation time:
Whatever they have extra from the $200M, after literally just moving things around in the stores, could be posted to lift them above their already arbitrarily set conservative 2018 earnings outlook.
That said, I could be wrong, and perhaps they just shilled together a plan for something to say during the earnings report.
To me it seems like they have a good model, and a safe outlook could potentially poise them to show out as opposed to flop. Like, they came to the fair on Tuesday to scope it out, but they will be back Friday, on bracelet night, and have a massively good time.
Any other thoughts?
Sources:
Watkins bizjournals article.
Low IBD article.
Finviz for numbers. -12.3% otd
Edit: I think they just need to pay someone to review what Schlotman, their CFO, wants to say. If he'd framed it differently maybe they'd not eat dirt every six months.
Also I added some stuff in the sources area
Submitted March 08, 2018 at 11:24AM by crowcawer http://ift.tt/2DaiENe
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