Kroger’s earnings surged in its fourth quarter, benefiting from the tax reform, as the supermarket retailer continued to ramp up its Restock Kroger investments and initiatives.
Net earnings for the fourth quarter totaled $854 million, or $0.96 per diluted share. Adjusted net earnings for the fourth quarter totaled $562 million, or $0.63 per diluted share. Net earnings in the same period last year were $506 million, or $0.53 per diluted share.
Total sales increased 12.4% to $31 billion in the fourth quarter compared to $27.6 billion for the same period last year. Kroger’s identical supermarket sales, without fuel, was 1.5% in the fourth quarter of 2017.
In the fourth quarter, Kroger reached a definitive agreement for the sale of its convenience store business unit to EG Group for $2.15 billion. The company also said it plans to expand its Scan, Bag, Go program to 400 stores.
In the fiscal year, net earnings totaled $1.9 billion, or $2.09 per diluted share. Net earnings in 2016 were $2 billion, or $2.05 per diluted share. Total sales increased 6.4% to $122.7 billion in 2017 compared to $115.3 billion in 2016. Identical supermarket sales growth, without fuel, was 0.7%.
Kroger is targeting identical supermarket sales growth, excluding fuel, to range from 1.5% to 2% in 2018.
Rodney McMullen, chairman and CEO, Kroger, said, “We launched Restock Kroger in the fall of 2017 and finished the year with positive momentum in our sales and overall business. Customers are letting us know that they see, feel and appreciate our efforts to redefine the customer experience— and they are rewarding us with growing loyalty. This is the cycle that creates long-term value for shareholders. The Tax Cuts and Jobs Act is a catalyst that is enabling us to accelerate investments in Restock Kroger. We are taking a balanced approach to ensure tax reform benefits our associates, customers and shareholders. What we’ve previously said is that sharing the benefits with our associates and customers will create a more sustainable and stronger business model for the future. As we embark on our first full year of Restock Kroger, we are encouraged at the start of 2018 and confident in our ability to deliver on both our plan for the year and our long-term vision to serve America through food inspiration and uplift.”