Kroger (KR) came out with quarterly earnings of $1.14 per share, beating the Zacks Consensus Estimate of $1.12 per share. This compares to earnings of $1.34 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 1.79%. A quarter ago, it was expected that this supermarket chain would post earnings of $0.98 per share when it actually produced earnings of $0.98, delivering no surprise.Over the last four quarters, the company has surpass ...

Core Insights - Kroger reported mixed Q4 earnings, with adjusted EPS of $1.14 exceeding consensus expectations but total revenue of $34.3 billion falling short of estimates and down 7% year over year [1][2][6] - The resignation of CEO Rodney McMullen raised concerns about the company's leadership during a challenging financial period [2] Financial Performance - Adjusted EPS was $1.14, compared to analysts' estimate of $1.11 and last year's $1.34, reflecting a 15% decline [3] - Total sales decreased to $34.3 billion from $37.1 billion in Q4 2023, marking a 7% year-over-year decline [3] - Operating profit fell to $912 million from $1.19 billion, a decrease of 23.6% year over year [3] - Identical sales growth was 2.4%, a significant improvement from a decline of 0.8% in the previous year, representing a 3.2 percentage point increase [3] Business Overview - Kroger operates over 2,700 supermarkets across 35 states, utilizing a diverse retail format that includes pharmacies and fuel centers [4] - The company generated $31 billion in sales from its private label brands, known as "Our Brands," in 2023 [4] Digital Transformation - Kroger has invested heavily in digital transformation, with digital sales increasing by 11% year over year [5][7] - The company focuses on personalized customer experiences, linking 95% of transactions to customer data [5] Q4 Developments - The 7% drop in total sales was primarily due to reductions in fuel and pharmacy sales, although same-store sales rose by 2.4% excluding fuel [6] - Alternative profit businesses, including advertising and data services, contributed $1.35 billion to operating profit, with media-related revenue increasing by 17% [7] Cost Management - Operating, General, and Administrative Expenses rose due to wage investments and incentive plans, impacting profitability [8] - A LIFO accounting charge of $30 million indicated inventory cost pressures, compared to an $18 million credit last year [8] Future Outlook - Kroger anticipates identical sales growth of 2%-3% in fiscal 2025, with adjusted FIFO operating profit projected between $4.7 billion and $4.9 billion [9] - The company plans to focus on digital ecosystems and customer experience enhancements to drive growth [9][10] - Management expresses optimism for the next fiscal year, aiming to improve competitive pricing and expand its digital footprint [10]

Core Viewpoint - Kroger Co. has issued a conservative outlook due to economic uncertainties related to tariffs and trade wars, indicating challenges from factors "outside our control" [1] Company Summary - Kroger is unable to provide a full reconciliation of its earnings projections due to the unpredictability of certain adjustment items, stating that it would require "unreasonable effort" to do so [1]

Financial Reporting - The Kroger Co. plans to report its fourth quarter and full-year 2024 results on March 6, 2025, along with full-year 2025 guidance[4] Leadership Changes - Rodney McMullen has resigned as Chairman and CEO effective immediately, with no impact on the company's financial performance reported[5][6] - Ronald Sargent has been appointed as interim CEO and Chairman of the Board, effective immediately[8] - Sargent has extensive experience in retail, having served as CEO of Staples, Inc. from 2002 to 2016[9] - The Board has formed a Search Committee to find the next CEO, engaging a nationally recognized firm for the search[8] - McMullen will forfeit all unvested equity awards and will not receive a 2024 bonus due to his resignation[7]

Core Insights - Kroger reported strong fourth quarter results for fiscal year 2024, exceeding expectations and demonstrating the strength of its business model and execution by its teams [3][4][10] - The company is positioned for long-term sustainable growth, focusing on enhancing customer experience through quality and low prices [3][24] Fourth Quarter Financial Results - Total sales for Q4 2024 were $34.3 billion, down from $37.1 billion in Q4 2023, with a 2.4% increase in identical sales excluding fuel [4][10] - Earnings per share (EPS) for Q4 2024 was $0.90, compared to $1.01 in Q4 2023, while adjusted EPS was $1.14, unchanged from the previous year [10][59] - Operating profit for Q4 2024 was $912 million, down from $1.194 billion in Q4 2023, with adjusted FIFO operating profit at $1.174 billion [10][62] - Gross margin improved to 22.7% in Q4 2024 from 22.3% in Q4 2023, primarily due to the sale of Kroger Specialty Pharmacy and lower shrink [5][14] Fiscal Year 2024 Financial Results - Total company sales for fiscal year 2024 were $147.1 billion, down from $150.0 billion in 2023, with a 1.5% increase in identical sales excluding fuel [13][14] - EPS for fiscal year 2024 was $3.67, up from $2.96 in 2023, while adjusted EPS was $4.47, down from $4.76 [9][59] - Operating profit for the year was $3.8 billion, compared to $3.1 billion in 2023, with adjusted FIFO operating profit at $4.7 billion [9][62] Digital Sales and Growth Initiatives - Digital sales grew by 11% in Q4 2024, with more than $13 billion in total digital sales for the year [10][24] - Kroger introduced over 900 new Our Brands items in 2024, including 370 fresh items, and launched new meal bundles to promote healthy eating [27][24] Capital Allocation and Share Repurchase - Kroger commenced a $5 billion accelerated share repurchase program, with 65.6 million shares repurchased during the quarter [19][24] - The company expects to continue generating strong free cash flow and plans to invest in business growth while maintaining its dividend [17][24] Guidance for Fiscal Year 2025 - Kroger anticipates identical sales growth of 2.0% to 3.0% for fiscal year 2025, with adjusted FIFO operating profit projected between $4.7 billion and $4.9 billion [26] - The company expects adjusted net earnings per diluted share to be in the range of $4.60 to $4.80, with adjusted free cash flow of $2.8 billion to $3.0 billion [26]

Kroger's ex-CEO forfeited more than $11 million in bonus and stock payments when he resigned.Rodney McMullen still had hundreds of millions in Kroger stock, according to the filings.Kroger cited McMullen's "personal conduct" in announcing his resignation on Monday.The former CEO of Kroger forfeited more than $11 million when he resigned from the grocery chain this week. McMullen left behind $11.2 million in a potential bonus as well as stock and options when he left the company, Kroger's SEC filings show.Wi ...

Core Insights - Kroger Co's CEO Rodney McMullen has resigned amid an investigation into his personal conduct, which the board deemed inconsistent with the company's ethics policy [1] - The resignation comes just before Kroger's fourth-quarter earnings report, scheduled for March 6, which may impact stock performance [1] - Kroger's stock saw a slight increase of 0.2% in premarket trading following a price-target increase from Deutsche Bank [1] Stock Performance - Historically, Kroger's stock has shown strong post-earnings performance, with only two losses in the last eight earnings reports [2] - The average stock movement post-earnings has been 4.3% over the last two years, but current options pricing indicates an expected swing of 8.4% for the upcoming report [2] Market Dynamics - If current gains hold, Kroger shares could achieve their third gain in four sessions, reflecting a 27.9% year-over-year increase [3] - The stock has found support at the 40-day moving average, which has helped mitigate losses since reaching a record peak of $66.26 on February 24 [3] - There is potential for a short squeeze, as 6.7 million shares are sold short, representing 6% of the stock's float, indicating significant buying power [3]

Core Insights - Kroger Co. is expected to report declines in both revenue and earnings for the fourth quarter of fiscal 2024, with revenue estimated at $34,594 million, reflecting a 6.7% decrease year-over-year [1] - The earnings per share (EPS) consensus estimate is $1.10, indicating a 17.9% decline from the same quarter last year [2] Financial Performance - The Zacks Consensus Estimate for total retail sales, excluding fuel, is $30,895 million, which represents a 7.3% year-over-year decline [5] - Identical sales without fuel are projected to grow by 1.8%, a slowdown from the previous quarter's 2.3% increase [5] - Supermarket fuel sales are expected to decrease by 4.2% year-over-year to $3,323 million [5] Operational Challenges - Kroger is facing a challenging operating environment due to tightening consumer spending and increased competition, with budget-conscious households affected by inflation and higher interest rates [3] - The company has been dealing with rising operating, general, and administrative (OG&A) expenses, which increased by 22 basis points in the third quarter, potentially impacting profitability [4] Strategic Positioning - Despite the challenges, Kroger's customer segmentation strategy and focus on value-driven offerings are likely to help maintain its competitive position [6] - The company emphasizes a diverse fresh product selection, personalized shopping experiences, and a seamless digital ecosystem as core strengths [6] Earnings Prediction - Current predictions do not indicate a strong likelihood of an earnings beat for Kroger, with a Zacks Rank of 3 and an Earnings ESP of -0.20% [7]

About this content About Josh Lamb After graduating from the University of Kent in the summer of 2022 with a degree in History, Josh joined Proactive later that year as a journalist in the UK editorial team. Josh has reported on a range of areas whilst at Proactive, including energy companies during a time of global crisis, aviation and airlines as the sector recovers from the pandemic, as well as covering economic, social and governance issues. Read more About the publisher Proactive financial news and ...

Grocery giant Kroger said Monday (March 3) that Chairman and CEO Rodney McMullen resigned from the company after a board investigation of his personal conduct.The company did not specify the personal conduct but said in a press release that it “while unrelated to the business, was inconsistent with Kroger’s Policy on Business Ethics.”Kroger added that McMullen’s conduct is not related to the company’s financial performance, operations or reporting and did not involve any company employees.The company appoin ...