Executive Summary

• Kroger reported 1Q16 EPS of $0.70 versus the consensus estimate of $0.69.
• Total revenue was $34.60 billion versus expectations of $34.88 billion. Comps excluding fuel were up 2.4% versus consensus of 2.5%.
• Full-year guidance calls for EPS of $2.19–$2.28, consistent with prior guidance. The company believes EPS will be at the low end to the midpoint of that range, based on current fuel margin trends. Kroger expects fuel margins to be at or slightly below the five-year average. Management also reaffirmed its supermarket sales growth guidance of 2.5%–3.5%, excluding fuel.