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Kroger Co. experienced weak sales growth in its second quarter of fiscal 2018, and despite Wall Street's earnings guidance, saw its price fall by nearly 10% shortly after the market opened.
For the quarter ended August 18, sales totaled $ 27.87 billion, up 1% from $ 27.6 billion the previous year, said Kroger Thursday. Revenue growth was 1.8% excluding fuel sales, the divestiture of convenience store operations and the merger with Home Chef. The Cincinnati-based supermarket giant said digital sales had jumped 50 percent year-over-year.
Same-store sales (excluding fuel) increased slightly by 1.6% in the second quarter, compared to 0.9% in the 2017 quarter.
Second quarter net income was $ 508 million, or 62 cents per diluted share, compared with $ 353 million, or 39 cents per diluted share, a year ago. Kroger said the gain stems mainly from the increased market value of its investment in British grocer Ocado, in which it holds a 6% stake.
Adjusted net income was $ 336 million or 41 cents per diluted share. According to Thomson Reuters, analysts on average forecast an adjusted earnings per share of 37 cents, with estimates ranging from 32 cents to 45 cents.
"We are only two-quarters in our three-year Restock Kroger plan, and we are making solid progress. Kroger's customers have more than ever the means to communicate with us seamlessly with the recently launched Kroger Ship, the increased availability of Instacart, the successful ClickList offering and the sale of Simple Truth. China via Alibaba & # 39; s Tmall. declaration.
"We are pleased with our diluted earnings per share and identical sales results in the second quarter," he added. "We expect our space optimization investments in the first half of 2018 to continue towards the end of the third quarter."
For the first half of fiscal year 2018, Kroger recorded sales of $ 65.4 billion, up 2.4% from $ 63.88 billion in the same period last year latest. Same-store sales (excluding fuel) increased 1.8%, up from 0.4% a year earlier.
First half net income was $ 2.53 billion, or $ 3.03 per diluted share, compared with $ 656 million, or 71 cents per diluted share, a year ago.
Kroger noted that adjusted earnings per share (diluted) in the first half of 2018 was slightly higher than expected due to the rapid progress made with Restock Kroger, its strategic plan to redefine the customer experience. The company said progress included process changes that led to sustainable cost controls and alternative revenue streams with higher margins.
In the future, Kroger has increased its GAAP earnings guidance for fiscal 2018 to $ 3.88 to $ 4.03 per diluted share from its previous range of $ 3.64 to $ 3.79. dollars. The company said the change reflected the unrealized gain on Ocado shares, recorded in the second quarter.
Kroger confirmed its adjusted earnings per share forecast (diluted) of $ 2.00 to $ 2.15 for the full year. According to Thomson Reuters estimates, Wall Street's estimate is based on adjusted earnings per share of $ 2.12, with forecasts ranging from $ 2.05 to $ 2.07.
At the same time, Kroger expects identical sales (excluding fuel) to increase by 2% to 2.5% in 2018. Capital expenditures – excluding mergers, acquisitions and purchases of leased facilities – are evaluated. at about $ 3 billion for the year.
"We are on track to generate the free cash flow and incremental FIFO operating profit we are committed to making for 2018-2020 and to realize our long-term vision of serving the United States through Inspired by food and growth, "said McMullen.
At the close of the second quarter, Kroger operated 2,769 stores in 35 states under more than 20 banners: Kroger, Ralphs, Dillons, Smith's, King Soopers, Fry's, QFC, City Market, Owen, Jay C, Pay Less, Baker's, Gerbes. , Harris Teeter, Pick & Save, Copps, Metro Market, Mariano, Fred Meyer, Food 4 Less and Foods Co.
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