Kroger’s fourth quarter fell short of expectations, as the retailer asserted that 2018 was an investment year as it developed its Restock Kroger growth strategy initiatives.
In the fourth quarter, Kroger recorded company net earnings of $259 million, or 32 cents per diluted share, versus $854 million, or 96 cents per diluted share, in the year-before period. Adjusted for one time charges, net earnings were $390 million, or 48 cents per diluted share, versus $483 million, or 54 cents per diluted share, in the year-previous quarter.
Kroger missed a Zacks Investment research analyst consensus estimate of 53 cents per adjusted diluted share.
Identical store sales, excluding fuel, increased 1.9% in the quarter year over year. Kroger posted a total sales decrease of 9.5% in the quarter to $28.09 billion compared to the year-earlier period.
In the full fiscal year, Kroger recorded company net earnings of $3.11 billion, or $3.76 per diluted share, versus $1.91 billion, or $2.09 per diluted share, in the year before. Adjusted net earnings were $1.75 billion, or $2.11 per diluted share, versus $1.78 billion, or $1.95 per diluted share, in the fiscal year previous.
For fiscal 2018, Kroger asserted that adjusted net earnings per diluted share results were slightly ahead of the company’s expectations due to results from the solid early execution of the Restock Kroger strategy, including process changes that led to sustainable cost controls and higher-margin alternative profit streams.
Identical store sales, excluding fuel, increased 1.8% year over year. Kroger posted a total sales decrease of 1.2% to $121.16 billion in fiscal 2018 compared to the year earlier.
“Kroger solidly delivered on what we set out to do in 2018, which was an investment year that laid the groundwork for us to achieve our 2020 Restock Kroger targets including financials,” said Kroger chairman and CEO Rodney McMullen. “We reached our FIFO operating profit goal and finished the year with sales and business momentum. We have a clear path to achieve $400 million in incremental FIFO operating profit growth and $6.5 billion in cumulative Restock cash flow by the end of 2020. As America’s grocer, Kroger has the winning combination of local presence plus a digital ecosystem enhanced by strategic partnerships enabling us to offer our customers anything, anytime, anywhere. We are transforming from grocer to growth company by deploying our assets to serve even more customers and create margin-rich alternative profit streams. We are well positioned to deliver on our Restock Kroger vision to serve America through food inspiration and uplift.”