Kroger Rises as Adjusted Quarterly Profit, Outlook Beat Estimates

Kroger advanced after the No. 1 U.S. grocery chain reported fiscal-fourth-quarter adjusted profit and a full-year profit outlook that beat Wall Street estimates.
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Kroger  (KR) - Get Report shares on Thursday advanced after the country’s biggest grocery chain reported fiscal-fourth-quarter adjusted profit and a full-year profit outlook that beat Wall Street estimates. 

Shares of the Cincinnati company at last check rose 2.8% to $34.17. In late January the stock touched a 52-week high just under $43. From that date through Wednesday's trading the stock had given back 23%.

For the quarter ended Jan. 31 Kroger swung to a net loss of $77 million, or 10 cents a share, from profit of $327 million, or 40 cents a share, in the year-earlier period.

The latest adjusted earnings of 81 cents a share were ahead of the FactSet consensus estimate of 69 cents a share.

The results reflect a $989 million pretax charge related to United Food and Commercial Workers pension commitments and adjustments.

Revenue rose 6.4% to $30.74 billion from $28.89 billion in the year-earlier period. Analysts surveyed by FactSet had estimated revenue of $30.82 billion.

Same-store sales excluding fuel were up 10.6%, also ahead of the FactSet consensus for 10.2% growth.

"Kroger continued to grow market share during the quarter," Chairman and Chief Executive Rodney McMullen said in a statement. 

"[Heightened] demand for fresh, convenient food and meal solutions across modalities, including in-store, pick up and home delivery, continued throughout the fourth quarter."

The executive cited "disciplined investments" in digital capabilities, "as well as our associates' relentless focus on our customers."

For the full fiscal year, digital sales for Kroger more than doubled (up 116%). 

And in fiscal 2021, the company returned $1.9 billion to holders, buying back $1.32 billion of shares and issuing $534 million of dividends.

For all of fiscal 2022 Kroger expects adjusted earnings of $2.75 to $2.95 a share. FactSet's survey was looking for $2.69 a share.

The guidance for fiscal 2022 "contemplates continued investments in associates and customers plus ongoing COVID-19 related costs, balanced with continued execution of cost savings initiatives and growth in our alternative profit businesses," Chief Financial Officer Gary Millerchip said.