Kroger Q4 sales, earnings fall; makes exec appointments
Keeping up with Walmart and Amazon is not cheap — just ask the nation’s largest supermarket company.
Kroger Co. on Thursday reported fourth quarter earnings and revenue that missed analysts’ expectations amid increasingly heated competition in the grocery market. The company also announced several executive promotions.
Net income totaled $259 million, or 32 cents a share, in the quarter ended Feb. 2, down from $854 million, or 96 cents a share, in the year-ago period. Adjusted earnings per share were 48 cents, below the 52 cents analysts were expecting.
Total sales fell 9.5% in the quarter, which had one less week than the year-ago period, to $28.1 billion, below estimates of $28.4 billion. Excluding fuel, the extra week in 2017 and other factors, sales rose 1.6%. Same-store sales, excluding fuel, rose 1.9%.
Kroger is coming off a three-year plan that included major investments in technology and delivery services to keep up with Walmart and Amazon, all of which has impacted profitability.
For the full year, Kroger’s adjusted net earnings totaled $1.7 billion, or $2.11 per diluted share. Adjusted net earnings in 2017 were $1.8 billion, or $1.95 per diluted share. Total sales decreased 1.2% to $121.2 billion. Adjusted sales increased 2.0%. Digital sales rose 58%. The company said Thursday that pickup and delivery services for online groceries now reach 91% of its customers.
“Kroger has the winning combination of local presence plus a digital ecosystem enhanced by strategic partnerships enabling us to offer our customers anything, anytime, anywhere,” stated CEO Rodney McMullen.
In executive appointments, Kroger announced the promotion of Gary Millerchip to senior VP and CFO, effective April 4, 2019, succeeding Mike Schlotman, who is retiring at the end of 2019. The company also announced that Yael Cosset will be promoted to senior VP and CIO, effective May 1, 2019, succeeding Chris Hjelm, who is retiring. And Stuart Aitken has been promoted to the newly-created role of senior VP, alternative business. Aitken assumes oversight for Kroger’s successful existing alternative profit businesses, including 84.51° and Kroger Personal Finance.
The company is expecting fiscal 2019 EPS of $2.15 to $2.25, which compares with a FactSet consensus of $2.25.
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