Kroger Boosts Annual Guidance On Solid Q3 Earnings Beat

  • Kroger Co KR reported third-quarter FY22 sales growth of 7.2% year-on-year to $34.19 billion, beating the consensus of $33.95 billion.
  • Identical Sales without fuel increased by 6.9%.
  • Adjusted EPS of $0.88 beat the analyst consensus of $0.82.
  • Gross margin was 21.4%, and the FIFO gross margin rate, excluding fuel, decreased by 5 basis points Y/Y.
  • Operating, general and administrative expenses rose 8% Y/Y to $5.6 billion.
  • Operating margin was 2.5%, and operating income for the quarter fell 3.1% to $841 million.
  • Kroger held $916 million in cash and equivalents as of November 5, 2022. Net cash provided by operating activities year-to-date totaled $3.3 billion.
  • Inventories as of November 5, 2022, increased 15.2% to $8.7 billion.
  • The company had a net total debt of $12.5 billion as of November 5, 2022.
  • The company plans to continue paying its quarterly dividend and expects this to increase over time. Kroger has already paused its share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons Companies, Inc. ACI.
  • Outlook: Kroger raised the FY22 adjusted EPS outlook to $4.05 - $4.15 (prior outlook $3.95 - $4.05) versus the consensus of $4.08.
  • It expects FY22 Identical sales without fuel to be 5.1% - 5.3% (prior view 4.0% - 4.5%).
  • Price Action: KR shares are trading higher by 2.64% at $50.49 on the last check Thursday.
  • Photo Via Company
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