CINCINNATI, OH - The Kroger Co. reported its fourth quarter and fiscal year 2024 results, provided 2025 guidance and updated investors on how Kroger is positioned for long-term sustainable growth.
Comments from Chairman and CEO Ron Sargent
"I am excited to join this talented and experienced management team in my role as interim CEO. I am committed to ensuring that we execute with speed and that our teams continue to advance our go-to-market strategy to deliver for our customers, associates, communities, and shareholders.
Kroger is operating from a position of strength, delivering fourth quarter results that came in ahead of expectations due to the strength of our model and the disciplined execution of our teams. We enter 2025 with positive momentum, focused on delivering an incredible customer experience through great quality at low prices."
Fourth Quarter Financial Results
Total company sales were $34.3 billion in the fourth quarter compared to $37.1 billion for the same period last year, including $2.7 billion from the 53rd week in 2023 and $737 million from Kroger Specialty Pharmacy sales. Excluding fuel, Kroger Specialty Pharmacy and the 53rd week in 2023, sales increased 2.6% compared to the same period last year.
Gross margin was 22.7% of sales for the fourth quarter compared to 22.3% for the same period last year. The improvement in gross margin was primarily attributable to the sale of Kroger Specialty Pharmacy and lower shrink, partially offset by lower pharmacy margins and the LIFO charge.
The FIFO gross margin rate, excluding rent, depreciation and amortization, fuel, and the 53rd week in 2023, increased 54 basis points compared to the same period last year. The improvement in rate was primarily attributable to the sale of Kroger Specialty Pharmacy and lower shrink, partially offset by lower pharmacy margins.
The LIFO charge for the quarter was $30 million, compared to a LIFO credit of $18 million for the same period last year.
The Operating, General and Administrative rate, excluding fuel, adjustment items and the 53rd week in 2023, increased 16 basis points compared to the same period last year. The increase in rate, was primarily attributable to the sale of Kroger Specialty Pharmacy, increased incentive plan costs, and investment in associate wages, partially offset by the continued execution of cost savings initiatives.
Fiscal 2024 Financial Results
Total company sales were $147.1 billion in 2024, which includes $2.0 billion of Kroger Specialty Pharmacy sales, compared to $150.0 billion for the same period last year, including $2.7 billion from the 53rd week in 2023 and $3.2 billion of Kroger Specialty Pharmacy sales. Excluding fuel, Kroger Specialty Pharmacy and the 53rd week in 2023, sales increased 1.8% compared to the same period last year.
Gross margin was 22.3% of sales for 2024 compared to 21.8% for the same period last year. The improvement in gross margin was primarily attributable to the sale of Kroger Specialty Pharmacy, Our Brands performance and lower shrink, partially offset by lower pharmacy margins.
The FIFO gross margin rate, excluding rent, depreciation and amortization, fuel, and the 53rd week in 2023, increased 32 basis points compared to the same period last year. The improvement in rate, excluding fuel and the 53rd week, was primarily attributable to the sale of Kroger Specialty Pharmacy, Our Brands performance and lower shrink, partially offset by lower pharmacy margins.
The LIFO charge for 2024 was $95 million, compared to a LIFO charge of $113 million for the same period last year.
The Operating, General and Administrative rate, excluding fuel, adjustment items and the 53rd week in 2023, increased 31 basis points compared to the same period last year. The increase in rate was primarily attributable to the sale of Kroger Specialty Pharmacy, increased incentive plan costs, an increase in costs due to the severity of general liability claims, and investment in associate wages, partially offset by the continued execution of cost savings initiatives.
View the full report here.
