Kroger Enjoys Decade of Growth
With the end of David Dillon's reign as CEO of The Kroger Co. approaching with year's end, the Cincinnati-based grocer is poised to enter a new era of leadership in fine shape as it reported its 40th consecutive quarter of same-store sales growth this week.
"Our quarterly results show once again that Kroger is uniquely positioned to grow and win in the U.S. food retail industry," Dillon said, leading his last earnings call as Kroger's CEO (he will continue as chairman through the end of 2014). "Our Customer 1st Strategy resulted in strong sales and earnings growth, lowered costs and helped improve Kroger's connection with our customers in the third quarter. Every one of our more than 343,000 associates deserves recognition for their individual work to achieve an unprecedented 40 consecutive quarters of positive identical supermarket sales. I know our entire team is hard at work to achieve the 41st."
Kroger enjoyed identical supermarket sales growth, without fuel, of 3.5 percent in Q3, which ended Nov. 9, with net earnings of 57 cents per diluted share, including a net 4-cents-per-share diluted benefit from certain tax items partially offset by expenses related Kroger's merger with Harris Teeter.
Total Q3 sales increased 3.2 percent to $22.5 billion, compared to $21.8 billion for the same period last year. Total sales, excluding fuel, increased 4.7 percent over the year-ago period.
Kroger's strong financial position has allowed the company to return more than $752 million to shareholders through share buybacks and dividends over the last four quarters. During Q3, Kroger repurchased 3.6 million common shares for a total investment of $148 million.
Capital investment, excluding purchases of leased property, totaled $641 million in Q3, compared to $474 million for the same period last year.
Maintaining Fiscal Guidance
Based on Q3 results, the company maintained its net earnings guidance range of $2.73 to $2.80 per diluted share for fiscal 2013. For Q4 of fiscal 2013, Kroger expects identical supermarket sales growth, excluding fuel, of 3 percent to 3.5 percent. The company expects capital investments to be approximately $2.4 billion for the year, excluding mergers, acquisitions and purchases of leased property.
"Kroger is successfully and consistently executing our Customer 1st Strategy and delivering on our growth commitments, which benefit our customers, associates and shareholders," Dillon said. "I could not be more confident in Kroger's future, knowing that our entire leadership team and Rodney McMullen will guide Kroger to even higher levels of performance."
Kroger, Progressive Grocer's 2013 Retailer of the Year, operates 2,414 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.