CINCINNATI — Kroger Co. here on Thursday posted its 40th consecutive quarter of identical-store sales growth, and also reported third-quarter earnings in line with analysts’ estimates.
The ID-store milestone prompted outgoing Chief Executive Officer David Dillon to conclude the company’s earnings conference call with a “thank-you” to the company’s employees.
“Ten years of positive identical-sales growth is simply amazing,” he said. “I'm proud to be a part of the organization that is committed to serving our customers and enriching the lives of others. Each of us had a role to play in reaching this milestone. It is one you should each be proud of.”
Kroger said net income for its fiscal third quarter, which ended Nov. 9, totaled $299 million, down 5.7% from the year-ago quarter, which included one-time gains from a credit-card lawsuit settlement and a reduction in pension-fund contributions. Excluding these items, Kroger's earnings per diluted share would have been $0.53 in the third quarter, a 15% increase over last year's third-quarter adjusted earnings per share of $0.46.
Read more: Kroger Announces Investment in Dallas
Sales increased 3.2% to $22.5 billion in the third quarter, and identical-store sales, excluding fuel, rose 3.5%.
Through three quarters, net income rose 6%, to about $1.1 billion, on a sales increase of 3.7%, to $75.3 billion.
Kroger said it expects IDs of 3% to 3.5%, excluding fuel, in the fourth quarter, but was cautious in its earnings guidance for the year, citing uncertainty around the economy and the impact of the 5.5% cut in Supplemental Nutrition Assistance Program benefits, effective Nov. 1, among other factors.
“So far in November you can see were SNAP dollars are down but customers are substituting and buying with cash [what they otherwise would have spent using SNAP],” said Rodney McMullen, president and chief operating officer, in the conference call.
J. Michael Schlotman, senior vice president and chief financial officer, said sales results in the final two months of calendar 2013 could be impacted by several unusual factors in addition to the SNAP cuts, including the shortened time between Thanksgiving and Christmas this year, unease over the impact of health care reform and the sluggish economic recovery.
In projecting its performance for the full year, Kroger gave a wide earnings estimate — between $2.73 and $2.80 per share — that it said reflected this uncertainty.
The wide guidance range might have contributed to a pullback on the stock on Thursday, according to analysts.
“Management’s cautious tone about Q4 is clearly having some impact on Kroger shares,” said Ajay Jain, an analyst at Cantor Fitzgerald, New York.
| Suggested Categories | More from Supermarketnews |
 |
|
|
|
