Kroger’s Restock Kroger initiatives seem to be paying off, as the retailer delivered strong earnings and sales growth in the first quarter.
In the first quarter, Kroger recorded company net income of $2.03 billion, or $2.37 per diluted share, versus $303 million, or 32 cents per diluted share, in the year-prior period. Adjusted for one-time items, company net earnings were $626 million, or 73 cents per diluted share, versus $546 million, or 58 cents per diluted share, in the year-previous quarter. Adjusted earnings per diluted share topped a MarketBeat-published consensus analyst estimate by a dime.
Kroger reported an identical supermarket sales increase, without the impact of fuel price volatility, of 1.4% for the first quarter. In calculating identical sales to be more inclusive of company business units including Kroger specialty pharmacy and ship-to-home solutions, Kroger stated that its identical sales, without fuel, gained 1.9% in the first quarter.
Net sales were $37.53 billion versus $36.29 billion in the year-earlier period. Operating profit was $1.03 billion versus $631 million in the year-previous quarter.
Kroger noted that its ongoing Restock Kroger initiative had an impact on first quarter sales, including the benefit of 66% digital sales growth. In addition, Kroger noted, the company’s Our Brands portfolio achieved its highest-ever dollar share in the quarter, driven by double-digit growth of the Simple Truth and Simple Truth Organic labels.
Rodney McMullen, Kroger chairman and CEO, said, “Restock Kroger is off to a fantastic start. Everything we do supports our customers engaging seamlessly with Kroger. Kroger is creating the future of retail by innovating our core business and adding exciting partnerships like Ocado and our planned merger with Home Chef. We are on track to generate the free cash flow and incremental FIFO operating profit that we committed to in Restock Kroger. We are confident in our ability to deliver on our plans for the year and our long-term vision to serve America through food inspiration and uplift.”