Sponsored By

Kroger comps inch ahead in 3Q but outlook cloudy

Smallest quarterly comp gain in 13 years

Jon Springer, Executive Editor

December 1, 2016

1 Min Read
krogergetty1540.jpg
Scott Olson/staff/Getty Images

Kroger Co.’s streak of positive same-store sales survived — barely — in the fiscal third quarter, reflecting challenges of ongoing price deflation and continued sales struggles at its newly acquired Roundy’s businesses.

The 0.1% non-fuel ID sales figure for the period ended Nov. 5 marked the 52nd consecutive quarter Kroger posted positive comps but the gain was the smallest since that streak began exactly 13 years ago. Moreover, the Cincinnati-based retailer forecast similarly modest comps for the current fourth quarter and first half of next fiscal year.

Total sales increased by 5.9% to $26.6 billion and net earnings decreased by 8.6% to $391 million. Earnings per share of 41 cents met consensus Wall Street estimates.

"I am proud of our associates for continuing to connect with our customers in a difficult operating environment,” CEO Rodney McMullen said in a statement. “Deflation persisted as we expected during the quarter. We are firmly focused on our long-term strategy of improving our connection with customers and associates, and continue working on process changes to lower costs. We don't change our strategy based on quarterly swings in results. We remain committed to delivering on our long-term earnings per share growth rate guidance.”

Kroger said it was expecting “slightly positive” ID sales in the current fourth quarter, but reduced the top of its expected annual earnings guidance range by 5 cents. Kroger now expects to post annual earnings per share of $2.03 to $2.08, or $2.10 to $2.15 when adjusted for a pension restructuring.

The company said it would provide specific guidance for fiscal 2017 when it reports fourth-quarter earnings in March, but said it anticipates positive identical supermarket sales and net earnings likely to be below the low end of the company's 8%-11% net earnings long-term growth plans.

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like