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Kroger Reports on Q4 and FY 2018

03/07/2019

In a press release dated March 7th The Kroger Company (KR) announced results for the 4th Quarter and Fiscal 2018 ending February 2nd 2019.

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)

4th Quarter Ending

Feb. 2nd 2019

Feb. 3rd 2018

Difference (%)

Sales:

$28,091,000

$31,031,000

-9.5

Gross profit:

$6,189,000

$6,791,000

-8.9

Operating income:

$391,000

$550,000

-28.9

Pre-tax Income

Net Income

$317,000

$259,000

$(104,000)1

$854,0002

+404.8

-66.7

Diluted earnings per share:

$0.32

$0.96

-66.7

Gross Margin (%)

22.0

21.9

+0.5

Operating Margin (%)

1.4

1.8

-22.1

Profit Margin (%)

0.9

neg

-

Long-term Debt:

$12,072,000

$12,029,000

+2.5

12 Months Trailing:

     

Return on Assets (%)

4.0

   

Return on Equity (%)

53.3

   

Operating Margin (%)

2.0

   

Profit Margin (%)

3.0

   

Total Assets

$38,118,000

$37,197,000

+2.5

Market Capitalization

$20,440,000

   

Notes:

1. $506 million pension adjustment 2. $957 million tax benefit.

For FY 2018 Kroger earned $3.08 billion on sales of $121.16 billion with an EPS of $3.80. This compares to $1.89 billion on sales of $122.62 billion with and EPS of $2.11

52-Week Range in Share Price: $22.85 to $32.74

Market Close on March 6th $28.44

Post-release noon March 7th $25.64 (down 9.9 percent)

Forward P/E 11.3 Beta 0.8

Same-store sales growth FY 2018 (excluding fuel) 1.8 percent

In commenting on results Rodney McMullen Chairman and CEO stated "Kroger solidly delivered on what we set out to do in 2018, which was an investment year that laid the groundwork for us to achieve our 2020 Restock Kroger targets including financials. We reached our FIFO operating profit goal and finished the year with sales and business momentum. We have a clear path to achieve $400 million in incremental FIFO operating profit growth and $6.5 billion in cumulative Restock cash flow by the end of 2020.

McMullen added "As America's grocer, 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. We are transforming from grocer to growth company by deploying our assets to serve even more customers and create margin-rich alternative profit streams. We are well positioned to deliver on our Restock Kroger vision to serve America through food inspiration and uplift."

For FY 2019 growth in sales value was projected at 2.0 to 2.3 percent over FY 2018: EPS within the range of $2.15 to $2.25. The Company will invest between $3.0 to $3.2 in capital expenditure during FY 2019.