Kroger Reports Mixed Second Quarter Results
CINCINNATI, OH – The Kroger Co. is reporting sales growth in digital revenue and Q2, according to a press release. The company’s net earnings of $353 million, or $0.39 per diluted share, and identical supermarket sales growth, without fuel, of 0.7% in Q2 2017, which ended on August 12. Kroger's net earnings for the second quarter last year were $383 million, or $0.40 per diluted share. The company’s adjusted net earnings for the second quarter last year were $454 million, or $0.47 per diluted share.
Kroger Chairman and CEO Rodney McMullen commented on the latest report, stating, "Through innovation, Kroger is redefining the food and grocery customer experience based on our core strengths. Our second quarter results demonstrate the progress we've made. We returned to positive identical supermarket sales growth in the second quarter. We had strong growth in both loyal and total households. Traffic is up, unit movement is up, market share is up, and our customers' price perception is excellent and continues to improve. We have and always will put the customer first in all we do."
Details of Second Quarter 2017 Results:
- Total sales increased 3.9% to $27.6 billion in the second quarter compared to $26.6 billion for the same period last year.
- Gross margin was 21.7% of sales for the second quarter. Excluding fuel, ModernHEALTH and the LIFO charge, gross margin decreased 30 basis points from the same period last year.
- Kroger recorded an $18 million LIFO charge in the second quarter of 2017, compared to a $12 million LIFO charge in the same period last year.
- Digital revenue up 126%, driven by ClickList
The company expects capital investments excluding mergers, acquisitions and purchases of leased facilities, to be in the $3.0 to $3.3 billion range for 2017.
"As our business continues to improve, we remain committed to delivering on our guidance in 2017 and believe we have the ability to grow identical supermarket sales and market share in 2018. In this dynamic operating environment, we will continue to provide annual guidance as we have done for many years but will no longer provide longer-term guidance," McMullen said.
Despite rebounding numbers, Business Insider reports that Kroger’s stock took a hit in the wake of the company's financial report, attributing the results to some skepticism from investors as retail competition heats up.
Kroger expects Q2 2017 ID Sales of 0.5 to 1.0%. As retailers continue to push produce, AndNowUKnow will keep reporting.