Earnings Preview: Kroger Co. (KR)

The Kroger Co. KR is currently lower on the session by 1.18%, trading at $21.00. The company is scheduled to report earnings tomorrow, before the opening bell. • Estimates The Street is looking for Q2 earnings per share of $0.36 on revenue of $18.73 billion. These estimates have fallen by $0.01 (-2.70%) over the past 90 days. The Whisper number for KR is $0.39. • Guidance The Street is looking for Q3 EPS of $0.32 on revenue of $18.47 billion. The full year 2011 estimates are $1.74 per share on revenue of $81.07 billion; FY 2012 is at $1.95 per share on revenues of $84.50 billion. • Technical Picture KR have been trading in a range since March of 2009, with ~$20.00 being support and ~$22.25 resistance. On a more near-term basis, the stock touched a low of $19.15 and has been rallying, albeit in a volatile manner. KR is now sitting at the 50-day moving average, at a key pivot point. Based on the next large movement in the stock, traders will see id the stock heads back down to support or tests resistance to the topside. • Volatility Both historical volatility and implied volatility have been trending sideways for the past twelve months, though implied has diverted from historical as of late. Currently HI is at 22% and IV is at 30%. The front month $21.00 straddle is trading at 45.66%; the October $21.00 straddle is trading at 28.24%. Vol is not notably skewed either way. The Kroger Co. is a retailer in the United States. The company also manufactures and processes some of the food for sale in its supermarkets. As of January 30, 2010, the company operated, either directly or through its subsidiaries, 2,468 supermarkets and multi-department stores, 893 of which had fuel centers. The company's supermarket and multi-department stores operate under banners, including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's, Fry's Marketplace, Dillons, QFC and City Market. Kroger operates 40 manufacturing plants, primarily bakeries and dairies. In addition to the supermarkets, it operated through subsidiaries, 777 convenience stores and 374 fine jewelry stores. Its fine jewelry stores located in malls are operated in leased locations. In addition, 87 convenience stores were operated through franchise agreement