Kroger Co (NYSE:KR) is gathering attention this morning, after CEO Rodney McMullen suddenly resigned amid an investigation into his personal conduct. The grocery giant’s board of directors yesterday found McMullen’s conduct to be “inconsistent with Kroger’s Policy on Business Ethics.”
The c-suite shakeup comes before the company’s fourth-quarter report, which is due out before the open on Thursday, March 6. Kroger stock was last seen up 0.2% in premarket trading, shaking off broader market weakness after a price-target hike from Deutsche Bank to $57 from $55.
The equity saw next-day losses after only two of its last eight earnings reports, pointing to a strong post-earnings record. KR averaged a 4.3% move in the last two years, regardless of direction, but this time around the options pits are pricing in a much bigger 8.4% swing.
Should today’s gains hold, shares could mark their third gain in four sessions, and extend a 27.9% year-over-year lead. Though KR has taken a breather from its Feb. 24, record peak of $66.26, long-term support at the 40-day moving average stepped in yesterday to keep losses in check.
There’s potential for a short squeeze, should Kroger’s quarterly results impress. The 6.7 million shares sold short make up 6% of the stock’s available float, or nearly seven days’ worth of pent-up buying power.
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