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Kroger finishes 2012 on strong note
March 8th, 2013
CINCINNATI – Kroger Co. wrapped up fiscal 2012 with a larger-than-expected fourth-quarter profit, while full-year reported earnings rose by more than 140% to $1.5 billion.
Excluding special items related to a pension-plan and LIFO adjustments as well as the impact of an extra week, adjusted net profit for fiscal 2012 rose 5.3% to $1.36 billion.
Full-year sales rose 7.1% to $96.75 billion as identical-store sales excluding fuel expanded 3.5%. The top line for the fourth quarter, meanwhile, soared 12.8% to $24.15 billion, reflecting an extra week versus fiscal 2011. Identical-store sales excluding fuel gained 3% during the period, marking the 37th consecutive quarter of identical-store sales growth.
Kroger reported fourth-quarter earnings of $461.5 million compared with a loss of $306.9 million in the prior-year period. Excluding special items, adjusted earnings grew 12.9% to $403.1 million, or 77 cents per share, from $357.1 million, or 63 cents per share, a year ago. Analysts surveyed by FactSet expected adjusted earnings of 70 cents per share on revenue of $24 billion.
"Kroger had an outstanding fourth quarter and an outstanding year," said chairman and chief executive officer David Dillon during a conference call. "We delivered on ID sales growth, we exceeded expected earnings per share growth, we increased FIFO operating margin and we increased our dividend 30%."
Dillon went on to describe consumer confidence that remains fragile in the face of ongoing economic uncertainty, fluctuating gas prices, higher payroll taxes and uncertainty about government policy. However, according to president and chief operating officer Rodney McMullen, Kroger succeeded in expanding its market share in 10 of 19 marketing areas tracked by Nielsen Homescan, and declined in nine. In 17 markets where Kroger’s chief competitor is Walmart’s Supercenters, the grocer increased its share in nine while losing ground in eight.
Looking ahead to fiscal 2013, chief financial officer Michael Schlotman said that identical-store sales excluding fuel are expected to grow between 2.5% and 3.5%, while full-year net earnings are estimated to range between $2.71 and $2.79 per diluted share.