| 06/17/2010 |
KROGER QUARTERLY RESULTS |
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The Kroger Co. (NYSE:KR - News) today reported total sales, including fuel, increased 8.7% to $24.8 billion in the first quarter of fiscal 2010 compared with $22.8 billion for the same period last year. Excluding fuel sales, total sales increased 3.1% in the first quarter, which ended May 22, 2010, over the same period last year. Identical supermarket sales, without fuel, increased 2.4% in the first quarter over the same period last year.
Net earnings for the first quarter totaled $373.7 million, or $0.58 per diluted share. Net earnings in the same period last year were $435.1 million, or $0.66 per diluted share.
“I am pleased with the strong positive identical sales growth we achieved in the first quarter while striking a better balance on margin investments. Our Customer 1st strategy continues to deliver results through improvements in all four key areas we target: our people, our products, the overall shopping experience in our stores, and prices,” said David B. Dillon, Kroger’s chairman and chief executive officer. “As a result, the total number of families we serve continues to grow and our most loyal customers are buying more with us.”
Details of First Quarter 2010 Results
Including Kroger’s retail fuel operations, FIFO gross margin (Table 1) was 22.66% of sales for the first quarter of fiscal 2010, a decrease of 168 basis points compared to the first quarter last year. Excluding retail fuel operations, FIFO gross margin decreased 77 basis points. Supermarket selling gross margin (Table 1) declined 71 basis points without fuel.
Kroger recorded a $15.4 million LIFO charge during the quarter, a decrease of $7.7 million from the same period last year. Excluding retail fuel operations, the LIFO charge decreased 4 basis points as a percentage of sales.
Including Kroger’s retail fuel operations, operating, general and administrative (OG&A) costs were 16.95% of sales, a decline of 72 basis points compared with the first quarter last year. Excluding retail fuel operations, OG&A increased 13 basis points from the same period last year as a result of higher health care and pension costs, and credit card fees. These rising expenses were mostly offset by identical supermarket sales leverage and the benefit from productivity improvements, process changes, and Kroger’s efforts to reduce energy usage.
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