Kroger Breaks 13-year Streak of Comp Growth

For the first time in 13 years, The Kroger Co. has reported a drop in identical-supermarket sales, breaking a streak that lasted for 52 consecutive quarters.

Meanwhile, the Cincinnati-based grocery giant reported a 5.5 percent increase in overall sales for the fourth quarter, and 5 percent for all of 2016, plus its 12th consecutive year of market share gains. Other highlights for the year included adding more than 420 ClickList locations for 640 online ordering service locations, a record-high unit share for its corporate brands, and the creation of 12,000 new supermarket jobs in the past year.

“True to our history, we will continue making proactive investments in our Customer 1st Strategy to maintain our strong competitive position,” said Kroger Chairman and CEO Rodney McMullen. “We are lowering costs to invest those savings in our people, our business and technology. This approach will enable us to deliver on our long-term net earnings per diluted-share growth rate target of 8 percent to 11 percent, plus an increasing dividend, as it has in the past.”

Same-store sales, without fuel, fell 0.7 percent in the fourth quarter of 2016, which ended Jan. 28.. Total Q4 sales rose 5.5 percent to $27.6 billion, versus $26.2 billion for the year-ago period. Net earnings in Q4 totaled $506 million, or 53 cents per diluted share, compared with $559 million, or 57 cents per diluted share, a year ago

For the year, total sales increased 5 percent to $115.3 billion compared with $109.8 billion in 2015. Excluding fuel, total sales increased 6.7 percent in 2016, with the mergers with Roundy’s and ModernHEALTH contributing to this growth. Net earnings for 2016 totaled $1.98 billion, or $2.05 per diluted share, versus $2.04 billion, or $2.06 per diluted share, in 2015.

“In 2016, Kroger grew market share, increased tonnage and hired more than 12,000 new store associates,” McMullen said. “For 2017 and beyond, we will continue delivering for our customers while also setting the company up for our next phase of growth and customer-first innovation.”

Capital investments, excluding mergers, acquisitions and purchases of leased facilities, totaled $3.6 billion for the year, compared with $3.3 billion in 2015.

Kroger anticipates identical-supermarket sales, excluding fuel, to range from flat to 1 percent growth for 2017.

Kroger operates 2,796 retail food stores under a variety of local banners in 35 states and the District of Columbia.

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