Kroger Q1 beats Street amid surging digital sales
Kroger Co.’s investments in expanding its online business are paying off.
Kroger reported total company sales of $37.3 billion, more than analysts had expected, for the quarter ended May 25, down from $37.7 billion in the year-ago period. Kroger attributed the decrease to the sale of its convenience store business unit. Total sales, excluding fuel and the effect of selling the convenience store business unit, increased 2.0% from the same period last year.
Same-store sales grew 1.5%, while digital sales jumped 42%.
Net income fell to $772 million, or 95 cents a share, from $2.03 billion, or $2.37 a share. Adjusted earnings per share came in at 72 cents, just beating Street estimates of 71 cents.
Kroger has invested in an array of initiatives to transform the customer experience as part of its Restock Kroger strategy, from piloting driverless deliveries to committing to building high-tech automated warehouse facilities with digital and robotic capabilities as part of its partnership with Ocado. Most recently, it launched a test of a 30-minute grocery delivery service in two stores, called Kroger Rush.
“We are building momentum in the second year of Restock Kroger, which is off to a solid start, said chairman and CEO, Rodney McMullen. “The entire company is focused on redefining the grocery customer experience, improved upon by exciting partnerships that will create value. We are on track to generate the free cash flow and incremental adjusted FIFO operating profit that we committed to in 2019 as part of Restock Kroger.”
Kroger confirmed its 2019 guidance ranges for identical sales growth of 2.00% to 2.25% and for adjusted earnings of $2.15 to $2.25 per share.
No comments found