Kroger Q4 Adj. EPS Tops Estimates, But Revenue Miss

Supermarket chain Kroger Co. (KR) on Thursday reported that it slipped to loss in the fourth quarter compared to a profit last year, hurt by pension plan withdrawal liabilities. Adjusted earnings per share topped analysts’ estimates, while quarterly revenues missed it. However, the company initiated adjusted earning guidance for the full-year 2021, well above analysts’ estimates.

Kroger reported a net loss attributable to Kroger of $77 million or $0.10 per share for the quarter, compared to net income of $327 million or $0.40 per share in the prior-year quarter.

Excluding items, adjusted earnings for the quarter were $0.81 per share, compared to $0.57 per share in the year-ago quarter.

Total company sales grew 6.3 percent to $30.74 billion from $28.89 billion in the same quarter last year. Excluding fuel and dispositions, sales climbed 10.7 percent.

On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.69 per share on revenues of $30.86 billion for the quarter. Analysts’ estimates typically exclude special items.

Identical sales without fuel grew 10.6 percent, compared to an increase of 2.0 percent last year. Digital sales jumped 118 percent.

Looking ahead to fiscal 2021, Kroger now forecasts adjusted earnings in a range of $2.75 to $2.95 per share on total identical sales, without fuel, decline of 3 to 5 percent. The Street expects the company to report earnings of $2.69 per share for the year.

On a two-year basis, the company expects adjusted net earnings per share compounded annual growth rates of between 12 and 16 percent on identical sales, without fuel, growth to be in the range of 9 to 11 percent. This is expected to result in total shareholder return significantly above its previously communicated target of 8 to 11 percent.

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