By Christiana Sciaudone
Investing.com -- Kroger (NYSE:KR)'s terrific quarter and upbeat outlook haven't swayed everyone.Shares fell almost 4% on Monday after Bank of America (NYSE:BAC) downgraded the company to neutral from buy, expecting a slowdown from the coronavirus-driven second quarter.
"We think elevated F1H ID sales trends that benefitted from outsized food at home share thru the pandemic will continue decelerating into F2H with the re-opening of restaurants (w/ restaurant spend down just -8% y/y in the 1st week of Sept. see more here) & are likely to turn negative as KR laps tough comparisons in F22," Seeking Alpha reported the bank as saying.
Kroger updated full year guidance last week to reflect greater expectations compared to what was disclosed in March, including earnings per share of between $3.20 and $3.30 compared to the prior estimate of between $2.30 and $2.40.
"As a result of our strong performance in the first half, the expectation of sustained trends in food at home consumption and confidence in our ability to execute against the Restock Kroger strategy, we are updating our full year 2020 guidance," Chief Financial Officer Gary Millerchip said in a statement. "Relative to delivering on our total shareholder return growth targets as outlined at our November 2019 Investor Day, these factors also lead us to believe that our 2021 business results will be higher than we would have expected prior to the COVID-19 pandemic."
Shares have four buy ratings, 12 holds and no sells.
Kroger last week reported second quarter earnings per share of 73 cents compared to the expected 54 cents, on sales of $30.49 billion versus the estimated $29.97 billion.