Supermarket operator expects full-year profit growth of up to 50% as digital sales soar during pandemic.
Kroger’s digital business was again a standout in the quarter ended August 15, with online sales increasing 127%.
Same-store sales, excluding fuel, increased 14.6% in the second quarter, helping produce an operating profit on an unadjust4ed basis of $894 million, a 43% increase from a year earlier.
“We delivered extremely strong results in the second quarter and expect to deliver consistently attractive total shareholder returns,” Rodney McMullen, Kroger’s chairman and chief executive officer, said in a statement. “We are more certain than ever that the strategic choices and investments made through Restock Kroger to execute against our competitive moats – Fresh, Our Brands, Personalization and Seamless – have positioned Kroger to meet the moment, especially as customers are rediscovering their passion for food at home.”
Execution of Restock Kroger – the three-year plan instituted in 2017 to redefine the grocery shopping experience and create shareholder value by serving America through food, inspiration and uplift – contributed to a 61 basis-point decline in general costs. But that decline was partially offset by expenses related to safeguarding employees and customers from Covid-19.
Gary Millerchip, Kroger’s chief financial officer, said the company expects the eat-at-home trends driving Kroger’s strong first-half performance should continue. The retailer sees full-year adjusted earnings of between $3.20 and $3.30 per share, representing growth of 45% to 50% from fiscal 2019, Millerchip said. Sales are expected to climb at least 13%.