Publix's Q1 Earnings Surge Thanks to Tax Reform
Buoyed by the recent passage of the Tax Cuts and Jobs Act, Publix Super Markets saw a strong rise in net earnings during the first quarter of its fiscal 2018.
In Q1, net earnings came to $680.3 million, compared with $555.3 million during the same period in 2017, a 22.5 percent increase, while earnings per share for the period rose to 93 cents for 2018, from 73 cents per share in the year-ago period. Under the new legislation, the federal statutory income tax rate fell from 35 percent to 21 percent in 2018.
The company saw even higher earnings increases in its Q4 2017 results, in the wake of the act's passage last December.
Earnings were also affected by a new accounting standard requiring equity securities be measured at fair value with net unrealized gains and losses from changes in the fair value recognized in earnings. Excluding the impact of the new accounting standard, Publix’s net earnings would have been $704.2 million, a 26.8 percent increase, and earnings per share would have been 96 cents for Q1 2018.
Meanwhile, the grocer’s sales for Q1 2018 were $9.3 billion, a 6.8 percent rise from last year’s $8.7 billion, and comparable-store sales for the period climbed 5.1 percent. Publix estimates that sales grew 1.2 percent as a result of the Easter holiday’s being in the first quarter of 2018. In 2017, the effect of the Easter holiday was in the second quarter.
As of May 1, Publix’s stock price rose from $41.40 per share to $41.75 per share. The company’s stock is not publicly traded and is sold only to current Publix associates and members of its board of directors.
“I’m proud of our team’s results and pleased with our stock price increase considering the volatility in the stock market,” noted Publix CEO and President Todd Jones.
Privately owned and operated by its 190,000 employees, Lakeland, Fla.-based Publix has 1,182 stores in Florida, Georgia, Alabama, Tennessee, South Carolina, North Carolina and Virginia.