- Kroger (KR -1.7%) and other grocery store stocks are on watch after Wells Fargo warns on a number of headwinds, including tough pandemic earnings comparisons, higher digital investments and the lapping of a vaccine benefit in the quarters ahead.
- Kroger and Albertsons (ACI +1.6%) are singled out for facing tough battles on the labor front due to potential union pushback.
- Amid some pressure from politicians like Senator Elizabeth Warren on grocery chains "profiting" with higher prices, Albertson's made clear during its earnings call yesterday that cost inflation is real. CEO Vivek Sankaran pointed to higher expenses for ingredients, packaging, transportation and labor. Despite strong sales growth, ACI's gross margin rate slipped to 28.9% during the recent quarter from 29.3% a year ago.
- Grocery sector decliners on the day include Ingles Markets (IMKTA -3.1%), Weis Markets (WMK -1.9%) and Sprouts Farmers Market (SFM -1.5%). Of note, Walmart (WMT -0.6%) and Target (TGT -0.8%) are also underperforming.
- Albertsons earnings call transcript.