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Kroger Reports on Q3 of FY 2018

12/06/2018

In a press release dated November 6th The Kroger Company (KR) announced results for the 3rd Quarter of Fiscal 2018 ending November 10th 2018.

The following table summarizes the results for the period compared with the values for the corresponding quarter of the previous fiscal year (Values expressed as $ x 1,000 except EPS)

3rd Quarter Ending.

Nov. 10th 2018

Nov. 4th 2017

Difference (%)

Sales:

$27,672,000

$27,749,000

-0.3

Gross profit including LIFO adjustment and advertising expenses

$4,027,000

$6,217,000

-35.2

Operating income:

$647,000

$747,000

-13.4

Net Income

$317,000

$397,000

-20.2

Diluted earnings per share:

$0.39

$0.44

-11.4

Gross Margin (%)

14.5

22.4

-35.5

Operating Margin (%)

2.3

2.7

-14.8

Profit Margin (%)

1.2

1.4

-14.3

Long-term Debt:

$11,647,000

$13,118,000

-11.2

12 Months Trailing:

     

Return on Assets (%)

4.3

   

Return on Equity (%)

55.8

   

Operating Margin (%)

2.0

   

Profit Margin (%)

3.1

   

Total Assets

$38,141,000

$37,028,000

+3.0

Market Capitalization

$

   

52-Week Range in Share Price: $22.85 to $32.72

Market noon Nov. 6th post-release $28.48

Forward P/E: 12.6 Beta 0.7

Same Store Sales growth excluding fuel +1.6 percent. Growth in digital sales +60%.

 

In commenting on results Chairman and CEO Rodney McMullen stated, "Kroger is transforming our business model. We're moving from a traditional grocer to a growth company with both a strong customer ecosystem that offers anything, anytime, anywhere, and asset-light, high-margin alternative partnerships and services. Restock Kroger is the blueprint for this transformation.

"We are strengthening the Kroger ecosystem by reducing costs and investing the savings in our associates, technology, and price to grow units, traffic and share. Leveraging our store, logistics and data assets in turn creates incremental new profit streams, which then further redefines the customer experience. In this way, our new growth model will be a virtuous cycle.

"We are doing all of this and remain committed to delivering on our 2020 Restock Kroger financial targets."

The Company recorded a $12 million LIFO adjustment in Q3 2018 compared to $3 million inQ3 FY 2017.

YTD the Company has expended $589 million in the OCADA automated warehouse system.

Kroger confirmed EPS guidance of $2.00 to $2.15 for FY 2018.