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Kroger Reports on Q2 of FY 2018

09/13/2018

In a press release dated September 13th The Kroger Company (KR) announced results for the 2nd Quarter of Fiscal 2018 ending August 18th 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)

Quarter Ending.

Aug. 18th 2018

Aug. 12th 2017

Difference (%)

Sales:

$27,869,000

$27,597,000

+1.0

Gross profit:

$5,939,000

$5,988,000

-0.8

Operating income:

$549,000

$684,000

-19.7

Pre-tax Income*

After-tax Income

$628,000

$508,000

$540,000

$351,000

+16.3

+44.7

Diluted earnings per share:

$0.62

$0.39

+59.0

Gross Margin (%)

21.3

21.6

-1.4

Operating Margin (%)

2.0

2.5

-20.0

Profit Margin (%)

1.8

0.9

+100.0

Long-term Debt:

$12,121,000

$13,100,000

-7.4

12 Months Trailing:

     

Return on Assets (%)

4.9

   

Return on Equity (%)

55.2

   

Operating Margin (%)

2.3

   

Profit Margin (%)

2.9

   

Total Assets

$36,957,000

$36,600,000

+1.0

Market Capitalization

$22,750,000

   

*includes the proceeds from the sale of Ocado valued at $216 million.

52-Week Range in Share Price: $19.69 to $32.70

Market post-release, noon September 13th $28.53

Forward P/E: 12.6. Beta: 0.83

Same-store sales excluding fuel were 1.6 percent higher for Q2 2018 compared to Q2 2017. Digital sales increased 50 percent over a presumably small base.

Chairman and CEO Rodney McMullen commented "We are only two quarters into our three year Restock Kroger plan, and we are making solid progress. Kroger customers have more ways than ever to engage with us seamlessly through our recently-launched Kroger Ship, expanded availability of Instacart, successful ClickList offering, and selling Simple Truth in China through Alibaba's Tmall. He added "we feel good about our net earnings per diluted share and ID sales results in the second quarter. We expect our investments in space optimization during the first half of 2018 to become a tailwind late in the third quarter".

He concluded "we are on track to generate the free cash flow and incremental FIFO operating profit that we committed to in Restock Kroger for 2018-2020, and to deliver on our long-term vision to serve America through food inspiration and uplift."