39 Up Quarters for Kroger

The Kroger Co. enjoyed total sales approaching $23 billion in the second quarter of its 2013 fiscal year, marking the 39th consecutive quarter of same-store sales growth for the nation's leading traditional grocer.

“Kroger’s strong second quarter results have us on target to deliver the earnings per share growth we promised for the year,” said David B. Dillon, Kroger chairman and CEO. “As we have shown quarter after quarter, our consistent execution of the Customer 1st strategy deepens customer loyalty, increases sales and creates sustainable shareholder value.”

Total sales increased 4.6 percent to $22.7 billion in Q2 compared with $21.7 billion for the same period last year. Total sales, excluding fuel, increased 3.9 percent over the year-ago period. Net Q2 earnings totaled $317 million, or 60 cents per diluted share, versus $279 million, or 51 cents, last year. Operating, general and administrative costs plus rent and depreciation, excluding retail fuel operations, decreased 17 basis points as a percent of sales compared to the prior year as a result of strong sales leverage.

Kroger’s strong financial position has allowed the company to return more than $920 million to shareholders through share buybacks and dividends over the last four quarters. During the second quarter, Kroger repurchased 2.4 million common shares for a total investment of $90 million.

Capital investment, excluding acquisitions and purchases of leased property, totaled $507 million in Q2, compared to $444 million for the same period last year. The company continues to expect capital investments to be in the $2.1 billion to $2.4 billion range for the year, excluding acquisitions and purchases of leased property. Net total debt was $7.7 billion, a decrease of $446 million from a year ago.

Based on Q2 results, the company maintained its net earnings guidance range of $2.73 to $2.80 per diluted share for fiscal 2013. Kroger raised non-fuel identical supermarket sales growth guidance to 3 to 3.5 percent for FY 2013. The previous guidance was 2.5 to 3.5 percent.

During fiscal 2013, Kroger plans to use cash flow from operations to maintain its current investment grade debt rating, repurchase shares, pay dividends to shareholders, and fund capital investments. “We are improving our connection with customers and associates, rewarding shareholders and investing to grow our business,” Dillon said. “We intend to continue building on this positive momentum with execution at every level of the company to achieve our long-term earnings per share growth rate of 8 to 11 percent in fiscal 2013 and beyond.”

Cincinnati-based Kroger operates 2,418 supermarkets and multidepartment stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's.

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