Food phenom Kroger outdoes itself in Q1
Kroger turned in a stunning first quarter same store sales performance while expanding omnichannel and convenience capabilities designed to extend a comp streak now well into the 11th year.
Same store sales rose 5.7% excluding fuel in the first quarter ended May 23. Net income attributable to Kroger rose to $619 million, or $1.25 per share, in the first quarter, from $501 million, or 98 cents per share, a year earlier.
"Kroger continues to deliver strong sales and earnings results. We are pleased with our start for the year, with identical supermarket sales growth in every department and supermarket division,” said Kroger Co. Chairman and CEO Rodney McMullen. "We are managing through a volatile operating environment, with fuel margins normalizing compared to last year's record highs, inflation in some commodities and deflation in others. Our results show the power of our Customer 1st Strategy. Our associates are making a difference for our customers by providing excellent service and product quality and selection, and we continue to improve the shopping experience by bringing technology and digital capabilities to our business. Our integration with Vitacost.com is going very well; we are inviting customers in Cincinnati to try ClickList, our order online, pickup at the store solution we are learning from Harris Teeter; and more customers than ever before are engaging with our digital tools."
Kroger generated $33.1 billion in first quarter revenue, representing a slight increase of 0.3%. However, total sales, excluding fuel, increased 6.4% in the first quarter over the same period last year.
“Kroger has produced consistently remarkable results for so long that it might be easy for some to take a quarter like this for granted, so it is important to emphasize it is the efforts of our incredible team of associates, connecting with customers, that is driving our success,” McMullen said. “Time and again, we have shown that by taking care of our customers, Kroger is creating sustainable value for our shareholders.”
Kroger confirmed its net earnings guidance range of $3.80 to $3.90 per diluted share for fiscal 2015, but raised its identical supermarket sales growth guidance, excluding fuel, to a range of 3.5% to 4.5% for fiscal 2015. The original guidance was 3% to 4%. The company continues to expect capital investments excluding mergers, acquisitions and purchases of leased facilities, to be in the $3 billion to $3.3 billion range for the year.
Kroger, one of the world's largest retailers, employs nearly 400,000 associates who serve customers in 2,626 supermarkets and multi-department stores in 34 states and the District of Columbia under two dozen local banner names including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry's, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith's. The company also operates 780 convenience stores, 327 fine jewelry stores, 1,342 supermarket fuel centers and 37 food processing plants in the U.S.