CINCINNATI, OH - Once again Kroger came out of the gate strong yesterday with the release of their financial report for 2014's first fiscal quarter. With reported net earnings of $501 million, identical supermarket sales growth, without fuel, of 4.6% and excellent sales growth, Mike Schlotman, Kroger's Chief Financial Executive Officer, was understandably pleased with Kroger's performance.
“We continue to see outstanding, double-digit identical sales growth in our Natural Foods department. Our Produce and General Merchandise departments also posted strong ID sales growth, and Kroger’s pharmacy department continued its strong performance,” he shared with investors over a company conference call.
Rodney McMullen, Kroger's Chief Executive Officer, credits increasing customer confidence in the economy for at least part of this impressive sales growth.
“We see growing positive indicators in shopping behavior – our customers have exhibited less cautious spending behavior, for example. Consistent with the rise in the Consumer Confidence Index in May, our own customer research tells us that more customers perceive the economy to be in recovery,” McMullen explained.
Q1, Kroger's 42nd consecutive quarter of positive identical supermarket sales growth, was also notable because it was the first fiscal period in which Harris Teeter was included in Kroger's financial reports after their recent merger.
“Our merger with Harris Teeter is going exceptionally well. We are learning a lot from Harris Teeter associates and our business is performing well. We are even more excited about Harris Teeter’s people and the opportunities today than we were when we first merged. Across the company, our associates’ remarkably consistent execution continues to generate consistently remarkable results for our shareholders. We will continue building on this resilient foundation to grow aggressively into the future,” said Mike Ellis, President and Chief Operating Officer of Kroger.
Kroger's capital investment was up $69 million compared to 2013's first fiscal quarter, from $640 million to $709 million, according to a press release. Return on invested capital, measured on a rolling four quarters 52-week basis, was similarly strong, holding at a consistent 13.5%. Furthermore, due to the strength of their financial position, Kroger returned over $1.9 billion to shareholders through share buybacks and dividends over the course of the previous 4 fiscal quarters.
Congratulations on the strong quarter Kroger!
