Kroger Earnings Beat Expectations on Improving Grocery Trends

Kroger's adjusted earnings of 57 cents a share top analysts' forecasts by 2 cents.
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Shares of Kroger  (KR) - Get Report rose Thursday after the nation’s largest grocery chain reported fourth-quarter earnings that beat analysts’ estimates.

Adjusted earnings of 57 cents a share rose from 48 cents a year earlier and topped analysts’ forecasts of 55 cents, according to FactSet. Revenue rose 2.1% to $28.9 billion in the fourth quarter from $28.3 billion a year earlier. The latest figure matched analysts’ revenue projections.

Net income totaled $327 million, or 40 cents a share, up from $259 million, or 32 cents, a year ago.

Kroger Q4 Earnings graphic

"We are pleased with our 2019 results and improving trends in our supermarket business,” Kroger CEO Rodney McMullen said in a statement.

“We delivered on our commitments for ID [identical-store] sales without fuel, adjusted FIFO operating profit, and cost savings in addition to generating over $100 million of incremental operating profit through alternative profit streams in 2019,” McMullen added.

ID sales without fuel rose 2% in the fourth quarter, and adjusted FIFO operating profit climbed 21% to $758 million in the quarter from $628 million a year ago.

Kroger maintained its fiscal-year earnings guidance of $2.30 to $2.40 a share and identical-store sales growth of 2.25%. Those numbers don’t take into account any effects from the  coronavirus.

Analysts call for earnings of $2.33 a share and same-store sales growth of 2.1% , according to FactSet.

Kroger shares have slumped 13.4% in total over the last five years, as the company has faced intense competition from online grocery shopping. But the stock has rebounded 53% since July 23 amid signs its strategy was having some success.

Kroger traded at $32.10, up 3.68%.