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Kroger Co. (KR)

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Kroger profits match expectations but stocks fall

08 Mar 18

LONDON (ShareCast) - (ShareCast News) - US retailer Kroger published strong fourth-quarter growth that matched analyst predictions but its 2018 forecast disappointed investors and sent its stock tumbling.
Kroger said it expects 2018 earnings per share of $1.95 to $2.15, which disappointed the analysts who were expecting $2.15 per share on average.

The supermarket operator reported revenue up to $31.03bn in the fourth quarter from $27.61bn a year ago, which was better than the market expected.

Net income of $853m in the quarter compared to $506m the previous year, and equated to net earnings per share of 96 cents versus 53 cents last time. Adjusted EPS for the fourth quarter of 63 cents matched FactSet's predictions.

For the whole of 2017, Kroger's total sales increased 6.4% to $122.7bn while same-store sales increased by 1.5%, parallel to the FactSet consensus.

Net earnings fell to $1.9bn from $2.0bn in the previous year, with EPS up to $2.09 from $2.05 after a $1.6bn share buyback in the fourth quarter.

Gross margin was 21.% of sales in the final quarter of 2017 and 22% in the whole year.

Rodney McMullen, Kroger CEO said "Customers are letting us know that they see, feel and appreciate our efforts to redefine the customer experience - and they are rewarding us with growing loyalty. This is the cycle that creates long-term value for shareholders."

"The Tax Cuts and Jobs Act is a catalyst that is enabling us to accelerate investments in Restock Kroger. We are taking a balanced approach to ensure tax reform benefits our associates, customers and shareholders." he added.

The supermarket company expects to use the White House tax benefits to increase its funding for debt reduction and shares buy-backs.

For 2018, the company expects same-store sales to grow 1.5-2%, with the consensus having been at 1.6%.

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Market Data

Currency US Dollars
52 Week High $34.18
52 Week Low $20.82
Shares Issued 798.33m
Market Cap $23,255m


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