FY 2010 Sales Up 7.1% at Kroger

The Kroger Co. reported its fiscal year 2010 total sales increased 7.1 percent to $82.2 billion, compared with $76.7 billion for FY 2009.

Excluding fuel sales, total sales increased 3.4 percent over the same period last year. Same-store sales, without fuel, increased 2.8 percent in FY 2010 compared with the prior fiscal year. Net earnings for FY 2010 were $1.12 billion, or $1.74 per diluted share, versus $70 million, or 11 cents per diluted share, in FY 2009.

“Kroger’s business proved resilient in 2010, weathering a challenging environment that continued to affect many of our customers,” said David B. Dillon, Kroger’s chairman and CEO. “We achieved solid positive identical supermarket sales and market share growth, which demonstrates that we can strengthen our business and increase earnings by placing our customers’ needs first.”

Kroger Co. reported Q4 total sales, including fuel, of $19.9 billion in the fourth quarter of fiscal 2010, an increase of 7.4 percent compared with $18.6 billion for the same period last year.

Excluding fuel sales, total sales increased 4.2 percent over the same period last year. Identical supermarket sales, without fuel, increased 3.8 percent in the fourth quarter over the same period last year. Net earnings for the fourth quarter, which ended Jan. 29, totaled $278.8 million, or 44 cents per diluted share. Excluding a goodwill impairment charge, net earnings for the quarter would have been $290.8 million, or 46 cents per diluted share. Net earnings in the same period last year were $255.4 million, or 39 cents per diluted share.

“Our customers appreciate the distinct blend of friendly service, variety and value that Kroger’s family of stores offers, and our strong fourth quarter results show we are on the right path,” Dillon said. “Thanks to the Kroger team, we increased identical supermarket sales, gained more loyal customers and strengthened our competitive position among grocery retailers.”

FIFO gross margin, as reported, was 21.88 percent of sales for Q4 2010. Supermarket selling gross margin increased one basis point without fuel. Operating, general and administrative costs were 16.2 percent of sales. Positive identical sales growth, good cost control and productivity improvements offset the continued challenge of rising credit card fees, health care and pension costs, the company reported.

Capital investment, excluding acquisitions and purchases of leased facilities, totaled $440.5 million in Q4, compared with $458.9 million for the same period last year. At the end of Q4, net total debt was $7.3 billion, a decrease of $243.5 million from a year ago.

For fiscal year 2011, Kroger anticipates same-store sales growth, excluding fuel, of 3 to 4 percent. Full-year net earnings are expected to range from $1.80 to $1.92 per diluted share.

Cincinnati-based Kroger operates 2,458 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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