The Kroger Co. (KR, Financial), a major grocery store chain, said revenues for the three-month period ending Feb. 3 increased 12.4% from the prior-year quarter. Despite this, the company expects identical supermarket sales growth to decline this year from the prior year.
Brief summary of earnings
The Cincinnati-based grocery store reported 96 cents in net earnings per share for the quarter, up approximately 43 cents from the prior-year quarter.
CEO Rodney McMullen said the company finished the year with “positive momentum in [Kroger’s] sales and overall business,” which stemmed from the launch of “Restock Kroger” last fall. The company reported $112.7 billion in total revenue for the year, including $31 billion in the final three months.
Company reports lower earnings guidance for upcoming year
Although the company reported strong revenue growth in the prior year, Kroger expects net earnings per share to range between $1.95 and $2.15 per share for the upcoming year, approximately 10 cents lower than analyst estimates. Kroger Chief Financial Officer Michael Schlotman said in a CNBC interview that the company expects to “take a balanced approach” with respect to the tailwinds from corporate tax cuts.
Kroger’s share price tumbled 12.44% from its previous close of $26.23 on the weak earnings guidance. Despite this, the company still has a GuruFocus profitability rank of 7, driven primarily by expanding operating margins and a three-year CAGR of sales that outperform 70% of global competitors.
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Disclosure: No positions.
