US: Kroger raises guidance, outlines expansion plans
- Ups guidance to EPS growth of 8% to 11%
- Outlines growth plans backed by increase in capex
Kroger said it plans to increase capital spending by $200m a year
US retailer Kroger has upped its full-year guidance and outlined plans to invest in the targeted expansion of its store network.
Unveiling its long-term strategy for enhanced growth at its investor conference in New York yesterday (16 October), Kroger said the growth will be driven through expansion into new and existing markets, as well as improvement in its core business.
To support this, Kroger said it plans to increase capital spending by $200m a year and increase return on invested capital.
Over the long term, Kroger said it expects EPS growth of 8% to 11%, compared to its earlier target of 6% to 8%.
"Our proven strategy and market position provide a tremendous platform to accelerate growth and increase value creation for Kroger shareholders," said David Dillon , Kroger's chairman and CEO. "We are confident that Kroger's unmatched knowledge of the customer and disciplined approach to deploying capital will drive growth at attractive levels of return."
Commenting on Kroger's plans, Janney analysts said that "these attitudes make Kroger stand out from the crowd".
"With its shift from defensive to offensive capital deployment, we think the market will start to give Kroger credit for its steady outperformance over the past year and a half, both on the top and bottom lines," they wrote in an investor note.
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