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Kroger posts strong Q4 results

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CINCINNATI — Kroger Co. posted solid fourth-quarter results on Thursday, with sales fueled by its private-label offerings and its expanded online pickup and delivery capabilities.

Same-store sales (excluding gasoline) increased 2% from the comparable period a year earlier. Fourth-quarter digital sales increased 22%. Full-year comps were also up 2%, and digital sales increased 29%. Total company sales were $28.9 billion in the fourth quarter, compared to $28.3 billion for the same period last year. Excluding fuel and dispositions, sales grew 2.3%.

Kroger  reported fourth-quarter net income of $327 million, or 40 cents per share, up from $259 million, or 32 cents per share, last year. Kroger said it boosted gross margins in the fourth quarter thanks to improvements in sourcing goods, which offset headwinds from its pharmacy business.

Total company sales were $122.3 billion in 2019. Excluding fuel, dispositions and merger transactions, total sales grew 2.3%.

“We are pleased with our 2019 results and improving trends in our supermarket business,” said Rodney McMullen, Kroger’s chairman and chief executive. Kroger generated more than $100 million of incremental operating profit through alternative profit streams in 2019, McMullen said. Kroger is emphasizing alternative businesses in areas like personal finance, data analytics and in-store advertising that diversify its revenues and provide new growth opportunities.

“More importantly, the way that we delivered the year is consistent with our long-term financial model and sets us up to connect with customers in a deeper way,” McMullen said. “Restock Kroger is the right strategic framework to position the company for sustainable growth in the future, continue to improve the core business, and deliver strong total shareholder returns.” Kroger introduced Restock Kroger in 2017 as a blueprint for redefining the food and grocery customer experience.

Kroger reiterated its fiscal 2020 guidance, given late last year, and said the forecast does not include any potential impact from the coronavirus.

The company plans to close 35 of its nearly 2,800 stores this year, and recognized an impairment charge in the fourth quarter related to that plan.


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