In a third quarter impacted by the sale of Kroger’s convenience store division and acquisition of Home Chef, along with its investments in growth initiatives, the supermarket retailer reported a drop in net earnings.
Kroger posted company net earnings of $317 million, or 39 cents per diluted share, versus $397 million, or 44 cents per diluted share, in the 2018 period. Adjusted earnings in the third quarter were $394 million, or 48 cents per diluted share. The 2018 third quarter adjustment relates to Kroger’s Ocado securities investment.
Kroger’s adjusted earnings topped a MarketBeat-published analyst consensus estimate of 43 cents per diluted share.
Identical sales, without consideration of fuel, gained 1.6% in the quarter year over year. Total sales slipped 0.3% to $27.67 billion from the quarter last year. With fuel, the convenience store business unit divestiture and the merger with Home Chef excluded from consideration, total sales increased 1.7% in the third quarter from last year’s period.
In the quarter, digital sales grew about 60% versus the year-before period as the company expanded the Kroger Ship general merchandise and non-refrigerated food delivery operation to all divisions.
Kroger chairman and CEO Rodney McMullen said, “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.”