Jim Cramer Thinks This Grocery Retailer Can Withstand Inflation Better Than Rivals

CNBC host Jim Cramer said that grocery retailer Kroger Co. KR is withstanding the “worst inflation in decades” better than its rivals.

What Happened: Cramer noted that while the whole industry was struggling with inflation, Kroger was “coping just fine” and has even expanded gross margins.

“This company is perfectly poised to keep beating the earnings estimates like they have done for the last nine straight quarters,” Cramer said on his “Mad Money” show.

“If the Fed tightens too aggressively, causing an actual recession, this stock will only get more attractive because it’s exactly what money managers like to own when they’re worried about a real slowdown,” the CNBC host added.

Why It Matters: In early March, Kroger reported better-than-expected earnings results for the fourth quarter. The stock’s year-to-date returns are 23.6%.

The grocery retailer has seen strong digital sales in recent quarters due to eating-at-home trends amid the COVID-19 pandemic.

The Labor Department earlier this month reported a 7.5% increase in the consumer price index in the month of January, the fastest inflation growth since 1982.

Last week, the Federal Reserve raised interest rates for the first time since 2018 and noted that inflation remained elevated.

Price Action: Kroger shares closed almost 0.3% lower in Monday’s regular trading session at $55.68, but rose almost 0.6% in the after-hours session to $56.00.

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Photo: Courtesy of Nicholas Eckhart via Flickr