Kroger Lowers 2017 Earnings Guidance, Confirms 2017 ID Sales Guidance

The Kroger Co. (KR) lowered its 2017 GAAP net earnings guidance for 53 weeks to $1.74-$1.79 per share. Kroger’s adjusted net earnings guidance range is $2.00 to $2.05 per share. This assumes an $80 million LIFO charge compared to the company’s original estimate of $25 million. The previous adjusted net earnings guidance range was $2.21 to $2.25 per share. Kroger continues to expect identical supermarket sales growth, excluding fuel, of flat to 1% growth for 2017. Kroger said the company continues to expect capital investments excluding mergers, acquisitions and purchases of leased facilities, to be in the $3.2 to $3.5 billion range for 2017.

Over the long term, Kroger said, the company is committed to achieving a net earnings per share growth rate of 8-11%, plus a growing dividend.

The Kroger Co. reported net earnings of $303 million, or $0.32 per share, and identical supermarket sales decline, without fuel, of 0.2% in the first quarter of 2017. Kroger’s net earnings per share includes charges related to the withdrawal liability for certain multi-employer pension funds and a Voluntary Retirement Offering. Excluding the effect of these charges, Kroger’s adjusted net earnings were $546 million, or $0.58 per share. Kroger’s net earnings for the first quarter last year were $696 million, or $0.71 per share.

First-quarter total sales increased 4.9% to $36.3 billion compared to $34.6 billion for the same period last year. Total sales, excluding fuel, increased 2.9%. The company noted that the recent merger with ModernHEALTH contributed to sales growth.

Chairman and CEO Rodney McMullen, said: “We are driving our strategy of lowering costs to reinvest in ways that provide the right value to our customers. We’re pleased that identical supermarket sales in the last nine weeks of the first quarter were positive, and that has continued in the second quarter to date.”

by RTT Staff Writer

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