Hedgeye CEO Keith McCullough is adding Kroger (KR) to the short side of Investing Ideas. Below is a brief note.
Another "Tough COVID Comp" (they have to lap the best of times during 2020 COVID) with margin pressure and in the wrong Sector Style and Factor Exposures is Kroger (KR).
Here's Consumables analysts Howard Penney and Daniel Biolsi on the quarter that was just reported:
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For F22, Management guided EPS to $2.75-2.92 vs. consensus of $2.69. Management expects ID sales to decline 3% to 5%. Management expects the two-year stack ID sales to increase 9-11%. Management is planning on inflation to be 1-2% for the year. Gross margins are expected to contract due to mix and sales deleverage. QTD sales growth is just slightly below Q4 as it begins to lap the outbreak. The company will hold its analyst day on March 31st. Kroger is a best idea short as it faces difficult sales comparisons and gross margins are contracting during the best sales environment. |
Sell the bounce to lower-highs,
KM
