Kroger Reports First Quarter 2018 Results
CINNCINATI, OH - Kroger launched its Restock Kroger initiative, dove into meal kits by acquiring Home Chef, and upped the breadth of its tech presence after partnering with Ocado this past year, which resulted in positive financial results for its first quarter of 2018. As a result, Business Insider reported Kroger's stock surged nine percent, beating Wall Street expectations.
"Restock Kroger is off to a fantastic start. Everything we do supports our customers engaging seamlessly with Kroger. Kroger is creating the future of retail by innovating our core business and adding exciting partnerships like Ocado and our planned merger with Home Chef. We are on track to generate the free cash flow and incremental FIFO operating profit that we committed to in Restock Kroger. We are confident in our ability to deliver on our plans for the year and our long-term vision to serve America through food inspiration and uplift," said Chairman and CEO Rodney McMullen.
According to a press release, highlights of the first quarter of 2018, which ended May 26, are as follows:
- Great start to Restock Kroger, including progress on cost controls due to process change and space optimization
- Sold convenience store business unit for $2.15 billion ($1.59 per diluted share)
- Our Brands achieves highest-ever retail dollar share
- Ocado partnership and Home Chef merger agreement
- Total sales increased 3.4% to $37.5 billion in the first quarter compared to $36.3 billion, a 2.3% increase, for the same period last year
- First quarter adjusted net earnings were $626 million, or $0.73 per diluted share, compared to adjusted net earnings for the first quarter 2017 were $546 million, or $0.58 per diluted share
- Net earnings of $2.0 billion, or $2.37 per diluted share, compared to net earnings for the first quarter 2017 were $303 million, or $0.32 per diluted share, which was slightly ahead of the company’s internal expectations due to the great start to Restock Kroger, including process changes that led to especially strong cost controls and alternative revenue streams
- Identical supermarket sales of 1.4% for the first quarter of 2018, which the company intends to use this calculation going forward as a more appropriate measure to track Kroger’s performance as it redefines the grocery customer experience
In addition, Kroger raised the low end of its net earnings guidance range to $3.64 to $3.79 per diluted share for 2018, previously $3.59 to $3.79, as well as raised the low end of its adjusted net earnings guidance range to $2.00 to $2.15 per diluted share for 2018, from $1.95 to $2.15 previously.
To read the financial report in its entirety, click here.
Among its recent strategic changes, Kroger also made produce suppliers aware of updates to supply payment policies. As this story continues to develop, keep an eye on AndNowUKnow for the latest.