Why Mixed Kroger Earnings Are Not Enough

By Chris Lange Updated Jan 13, 12:25PM EST · Published Mar 3, 8:55AM EST

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Why Mixed Kroger Earnings Are Not Enough — © Thinkstock

Kroger Co. (NYSE: KR) reported its fiscal fourth-quarter financial results on Thursday before the markets opened. The company said it had $0.57 in earnings per share (EPS) on $26.2 billion in revenue. That compares to consensus estimates from Thomson Reuters that called for $0.54 in EPS on revenue of $26.29 billion. In the same period of last year, the retailer posted EPS of $0.52 and $25.21 billion in revenue.

The company kept the streak alive and posted its 49th consecutive quarter of positive identical supermarket sales growth, excluding fuel. During the fourth quarter, total sales excluding fuel increased 6.5% year over year, and including fuel it increased 3.8%.

In terms of guidance for the current full year, the company expects to have EPS in the range of $2.19 to $2.28 and that identical supermarket sales growth, excluding fuel, will be in the range of $2.5% to 3.5%. Consensus estimates call for $2.23 in EPS on $115.94 billion in revenue for the full year.

Kroger’s financial position allowed the company to return over $1.1 billion to shareholders through share buybacks and dividends in 2015. During the fiscal year, Kroger repurchased roughly 19 million common shares for a total investment of $703 million.
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Rodney McMullen, chairman and CEO of Kroger, commented on earnings:

2015 was an outstanding year for Kroger. We delivered on our performance targets, grew market share, created 9,000 new jobs, supported our communities, and continued to expand our use of technology to drive growth. And we’re not done. In 2016, we will continue making a difference for our customers and associates, growing our business, and delivering value for shareholders.

On the books, cash and store deposits in-transit totaled $1.2 billion at the end of this quarter, compared to $1.26 billion last year.

Shares of Kroger closed Wednesday at $40.65, with a consensus analyst price target of $44.39 and a 52-week trading range $27.32 to $42.75. Following the release of the earnings report, the stock was down 4.6% at $38.80 in early trading indications Thursday.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.