15 de diciembre de 2008 / 16:27 / hace 9 años

UPDATE 1-Credit Suisse downgrades Kroger

 (Recasts; adds details, share movement)
 Dec 15 (Reuters) - Credit Suisse downgraded Kroger Co (KR.N) to “neutral” from “outperform” as it expects the no. 1 U.S. grocery store chain’s identical-store sales growth to decelerate in 2009 amid moderating food price inflation and falling gas prices.
 Kroger’s non-fuel identical store sales growth will fall to 2.5 percent to 3.0 percent by 2009 end from 5.6 percent in the third quarter of 2008 as food price inflation moderates and the customer traffic benefit from its fuel promotion diminishes with the drop in gas prices, the brokerage said.
 Kroger has been providing a 10 cent per gallon discount at its fuel centers to customers who purchase $100 of groceries.
 The brokerage said it sees food price inflation moderating to flat-to-up 2 percent from 6 percent currently as more realistic, even as the company expects it to decline to 2 percent to 3 percent in 2009.
 Credit Suisse, which expects Cincinnati-based Kroger’s fuel earnings to drop by as much as 35 percent in 2009, cut its price target on the grocer’s shares to $26 from $32, saying the risks were not fully priced into the stock.
 The brokerage also raised concerns about the grocer’s rising selling, general and administrative costs, and said its recent expense management was “disappointing.”
 “While we see this issue as quickly fixable, it is a concern heading into 2009 given that expense control may be critical if identical stores actually slow,” Credit Suisse’s Edward Kelly said.
 Kroger’s shares fell to a low of $24.90, before recouping some losses to trade down 27 cents at $25.29 Monday morning on the New York Stock Exchange.  (Reporting by Dhanya Skariachan in Bangalore; Editing by Deepak Kannan)   

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