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(Bloomberg) -- Kroger Co. forecast higher-than-expected sales guidance, seeking to pacify concerns as questions linger about its chief executive officer’s abrupt exit.
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The Cincinnati-based grocer said comparable sales excluding fuel will grow between 2% and 3%, the higher end of what Wall Street analysts surveyed by Bloomberg were expecting.
But its adjusted earnings forecast for the fiscal year was lower than expectations, partly as lower pharmacy margins and other investments weigh on profit.
Shares rose 3% at 11 a.m. in New York trading on Thursday. The grocer’s stock is up around 24% over the last 12 months, ahead of the S&P 500 Index.
Kroger, the nation’s biggest grocer by sales, is seeking a new path forward after the company said Monday its long-tenured chief executive officer, Rodney McMullen, resigned following the board’s investigation into his personal conduct.
With his departure, Kroger has a relatively new bench of senior executives, including interim CEO Ron Sargent and incoming Chief Financial Officer David Kennerley, who joins the company next week.
On a call with analysts on Thursday, Sargent said the company already set its strategies for the year and he will focus on executing the plan.
The board is looking at internal and external CEO candidates, he said, adding that it’s in the process of updating potential prospects now. Sargent said he will serve in his role for as long as needed.
Kroger announced it was postponing its investor day due to the CEO search.
Last year, Kroger terminated a two-year effort to combine with Albertsons after a federal judge blocked that deal. Albertsons sued Kroger, claiming it didn’t try hard enough to secure regulatory approval.
Kroger and other retailers are facing a myriad of unknowns including consumer sentiment and tariffs imposed by President Donald Trump. Target Corp. and other retailers cautioned this week that consumers could see higher prices due to the levy especially on products like fresh produce, which has a shorter supply chain.
Kroger is expecting a slight increase in inflation in the upcoming year compared with last year, executives said on the call. Prices of fresh products like eggs and beef have ticked up recently, though the company isn’t seeing big increases across other categories.