Shares of the supermarket chain rose 5% in early trading on the forecast that came amid uncertainties following an abrupt ouster of long-time chief Rodney McMullen earlier this week, and escalating trade tensions.
"The forecast was strong, in our view, especially given heightened uncertainties this year," CFRA analyst Arun Sundaram said.
Kroger has also been dealing with the termination of a two-year effort to buy rival Albertsons (ACI.N) after courts blocked the $25 billion deal. Albertsons has subsequently sued Kroger alleging a breach of contract that led to the deal's demise.
The Cincinnati, Ohio-based grocer has, however, been benefiting from capitalizing on strong e-commerce demand, by offering customers convenient curbside pick up and faster order delivery.
This helped the company better compete with retailers Walmart (WMT.N), Target (TGT.N) and Amazon.com. Kroger reported an 11% jump in fourth-quarter digital sales.
It forecast growth in full-year identical sales, excluding fuel, in the range of 2% to 3%, compared with analysts' average estimate of a 1.96% rise, according to data compiled by LSEG.
It also projected 2025 adjusted earnings of $4.60 to $4.80 per share, compared with estimates of $4.79.
U.S. big-box retailers, unlike Kroger, have taken a cautious stance, fearing weak economic data and uncertainty around consumer spending as trade wars spark concerns of a deceleration in the American economy.
Kroger's pharmacy business has been a bright spot, boosted by sales of GLP-1 medications, used both for weight loss and managing chronic conditions including diabetes.
The company has also benefited from expanding its private brand portfolio in 2024.
It posted a 2.4% rise in fourth-quarter identical sales, excluding fuel, compared with analysts' average estimate of a 1.96% rise, according to data compiled by LSEG.
