Street View: Kroger bets on ecommerce margins as food spending weakens

Kroger KR.N narrowed annual sales forecast on Thursday on signs of shoppers turning more selective on their groceries and fresh produce purchases, while leaning more on promotions

At least five analysts cut PT following results

Median PT of 24 brokerages is $75.50

GROWTH HINGES ON ECOMMERCE PROFITABILITY

Jefferies ("buy," PT: $80) notes demand for fresh produce and online sales as bright spots alongside cost discipline while competition remains an "overhang"

J.P.Morgan ("neutral," PT: $71) says Kroger was upbeat on improving competitive edge, e-commerce profitability and store investments, but faces risk from softer industry trends and fierce competition

Telsey Advisory Group ("outperform," PT: $80) flags longer-term risks from Kroger's reliance on third-party delivery firms, warning they could turn into rivals, as Instacart is building its own grocery network, or hurt Kroger’s brand with poor service

UBS ("neutral," PT: $70) believes business trajectory remains "unclear" as KR will need to rely on its ecommerce and pharmacy segments to drive sales, pressuring its profitability