Kroger Gains After Q4 Bottom-Line Beat; Pauses Share Buyback Program


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  • Kroger Co (NYSE:KR) reported fourth-quarter FY22 sales growth of 5.4% year-on-year to $34.82 billion, missing the consensus of $34.91 billion.
  • Identical Sales without fuel increased by 6.2%. Adjusted EPS of $0.99 beat the analyst consensus of $0.89.
  • Gross margin was 21.8%, and the FIFO gross margin rate, excluding fuel, decreased by 1 basis point Y/Y.
  • Operating, general and administrative expenses rose 6.1% Y/Y to $5.8 billion.
  • Operating margin compressed from 2.9% to 2.4%, and operating income for the quarter rose 14.4% to $826 million.
  • Kroger held $828 million in cash and equivalents as of Jan. 28, 2023. Net cash provided by operating activities totaled $4.3 billion. The company had a total debt of $13.4 billion as of Jan. 28, 2023.
  • Buyback: Kroger has paused its share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons Companies, Inc. (NYSE:ACI).
  • Outlook: Kroger sees FY23 adjusted EPS of $4.45 - $4.60, above the Street view of $4.20.
  • It expects an FY23 adjusted FIFO operating profit of $5 billion - $5.2 billion. It sees identical sales, without fuel, of 1.0% – 2.0%.
  • Price Action: KR shares are trading higher by 6.86% at $46.35 on the last check Thursday.
  • Photo Via Company

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