Kroger beats first-quarter estimates on steady grocery demand

(Reuters) – Kroger (NYSE:) beat Wall Street estimates for quarterly same-store sales on Thursday, benefiting from more customers thronging to its outlets for lower-priced groceries as sticky inflation stretches household budgets.

Shares of the company, whose $24.6 billion deal with smaller rival Albertsons (NYSE:) is under antitrust review, rose about 4% in premarket trading.

As food prices start to ease faster than restaurant menu prices, American consumers on a tight budget are cooking more of their meals at home rather than going out to dine, helping lift sales at grocery stores.

Data from the U.S. Bureau of Labor Statistics showed that unadjusted food-at-home prices rose by 1% in May compared to last year, while food-away-from home prices climbed 4% versus May 2023.

Identical sales, excluding fuel, rose 0.5% at the supermarket chain in the first quarter, compared with analysts’ average estimate for 0.13% growth, according to LSEG data.

The company also reaffirmed its full-year same-store sales and adjusted profit outlook.