Egg Industry News and Commentary

  —  Mar 8

 
Kroger Reports on Q4 and FY 2016

    

In a press release dated March 2nd The Kroger Company (KRO) announced results for the 4th Quarter and Fiscal 2016 ending January 28th 2017.

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  Jan. 28/30

2016

2015

Difference (%)

Sales:

$27,611,000

$26,165,000

+5.5

Gross profit:

$6,128,000

$4,028,000

+52.1

Operating income:             

$858,000

$928,000

-4.3

Net Income

 

            $506,000

$559,000

-9.5

Diluted earnings per share:

$0.53

$0.57

-7.0 

Gross Margin (%)

22.2

15.3  

+45.1

Operating Margin (%)

3.1

3.5

-11.4

Profit Margin (%)

1.8

2.1

-14.3

Long-term Debt:

$11,825,000

     $9,709,000

        +21.8

12 Months Trailing:

 

 

 

           Return on Assets    (%)

6.1

 

 

           Return on Equity    (%)

30.0

 

 

           Operating Margin   (%)

3.0

 

 

           Profit Margin          (%)

1.7

 

 

Total Assets

$36,505,000

   $33,897,000

        +21.8

Market Capitalization

$27,550,000

 

          

 

52-Week Range in Share Price:          $28.71   to     $39.22

Market close March 1st (pre-release) $32.04.  Market close March 2nd $30.68       

Forward P/E: 12.4

 

For FY 2016 The Kroger Co. earned $1.98 billion on sales of $115.3 billion ($109.8 billion FY 2016) generating a diluted EPS of $2.05. Sales growth attained 6.7 percent excluding fuel.

 

In commenting on results for the 4th, Quarter Chairman and CEO Rodney McMullen stated, "True to our history, we will continue making proactive investments in our Customer 1st Strategy to maintain our strong competitive position. We are lowering costs to invest those savings in our people, our business, and technology. This approach will enable us to deliver on our long-term net earnings per diluted share growth rate target of 8 to 11 percent, plus an increasing dividend, as it has in the past.

"In 2016, Kroger grew market share, increased tonnage, and hired more than 12,000 new store associates. For 2017 and beyond, we will continue delivering for our customers while also setting the company up for our next phase of growth and customer-first innovation."

Kroger broke their 13-year streak of consecutive growth in same-store-sales in FY 2016 with a Q4 decline of 0.7 percent. Kroger will face concerted competition from deep discounters Aldi with 1,600 stores and a planned expansion to 2,200 units and the Lidl entry to the Northeast and Mid-Atlantic states. Given their impact on the top-three supermarket chains in the UK, Kroger and Walmart will have to reduce prices without diluting margins. It is reported that Aldi is 20 percent cheaper on a basket compared to Aldi.