Kroger(US:KR)2025-06-27 20:10Sales Performance - Kroger reported first quarter sales of $45,118 million, a slight decrease of 0.3% compared to $45,269 million in the same period last year[84]. - Total sales decreased by 0.3% in Q1 2025 compared to Q1 2024, primarily due to a 12.5% decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy[99]. - Total sales to retail customers without fuel increased by 1.1% to $40,401 million in Q1 2025, compared to $39,967 million in Q1 2024[100]. - Identical sales excluding fuel increased by 3.2% in the first quarter of 2025, compared to a 0.5% increase in the first quarter of 2024[84]. - Identical sales, excluding fuel, increased by 3.2% in Q1 2025, with total sales reaching $39,766 million compared to $38,535 million in Q1 2024[103]. eCommerce Growth - eCommerce sales grew by 15% in the first quarter of 2025, driven by strong demand for delivery solutions[88]. - eCommerce sales grew by 15% in Q1 2025, driven by a 20% increase in Delivery solutions[100]. Profitability - Operating profit for the first quarter was $1,322 million, representing a 2.2% increase from $1,294 million in the first quarter of 2024[84]. - Operating profit for Q1 2025 was $1.3 billion, or 2.93% of sales, an increase of 7 basis points from Q1 2024[116]. - FIFO operating profit was $1.4 billion, or 3.02% of sales, reflecting a 3 basis point increase compared to Q1 2024[117]. - Gross margin improved to 23.0% in Q1 2025 from 22.0% in Q1 2024, attributed to the sale of Kroger Specialty Pharmacy and lower supply chain costs[106]. Earnings - Adjusted net earnings attributable to Kroger per diluted common share were $1.49, a 4.2% increase compared to $1.43 in the first quarter of 2024[84]. - The net earnings attributable to The Kroger Co. excluding adjusted items was $996 million in Q1 2025, a decrease of 4.9% from $1,047 million in Q1 2024[97]. - Adjusted net earnings per diluted share increased by 4.2% to $1.49 in Q1 2025, compared to $1.43 in Q1 2024[97]. - Adjusted net earnings per diluted share for Q1 2025 were $1.49, a 4.2% increase from $1.43 in Q1 2024[123]. Cash Flow and Investments - Cash flows from operations decreased by 8% to $2.1 billion compared to the first quarter of 2024[88]. - Net cash provided by operating activities decreased to $2.1 billion in Q1 2025 from $2.3 billion in Q1 2024[126]. - Capital investments totaled $1.2 billion for both Q1 2025 and Q1 2024, with 27 supermarkets opened or remodeled[130]. Debt and Financial Management - Kroger is committed to maintaining a net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50[79]. - Total debt remained consistent at $17.9 billion as of May 24, 2025, compared to the fiscal year-end 2024[133]. - As of May 24, 2025, the company held cash and temporary cash investments of $4.7 billion, reflecting strong operational performance[138]. Shareholder Returns - The company returned $392 million to shareholders through share repurchases and dividend payments in the first quarter[88]. - The company expects total shareholder return within a target range of 8% to 11% over time[80]. Expenses and Charges - Operating, General and Administrative (OG&A) expenses as a percentage of sales increased to 17.6% in Q1 2025 from 16.8% in Q1 2024, influenced by decreased fuel sales and increased healthcare costs[111]. - Charges related to merger costs amounted to $175 million in Q1 2025, impacting OG&A expenses significantly[99]. - The company recorded a net charge of $44 million for labor dispute charges in Q1 2025[99]. - Net interest expense rose to $199 million in Q1 2025 from $123 million in Q1 2024, primarily due to increased average total outstanding debt[120]. - The effective income tax rate increased to 21.3% in Q1 2025 from 19.8% in Q1 2024, influenced by state income taxes and tax credits[121].