The Kroger Co (NYSE:KR) in line with growth path

Posted by Nathan Alexander September 17, 2013 0 Comment 1106 views


The Kroger Co (NYSE:KR) shares are in retest mode in the post earnings report phase. The fact of the matter is that there was nothing exceptional about the company’s earnings report. The only thing is that it continues to maintain equilibrium between the demands of its stockholders in an exemplary manner. It has witnessed 50% year-to-date results but it still has an appeal. There is a distinct possibility that the shares will set some fresh new highs for the rest of 2013. No spectacular short-term results can be expected though.

2nd quarter results

The Kroger Co (NYSE:KR) generated 2nd quarter revenues of $22.72B which was a 4.6% rise from the previous year and these were also in line with average analyst estimates of $22.71B. The company reported a $317M net profit which was a 13.6% rise from 2012. There was a 17.6% rise in the earnings per share to $0.60 which was perfectly aligned to analyst estimates.

The report

There was a 4.6% rise in total sales and a 3.9% rise in revenues. With the exclusion of the impact of volatility in fuel-sales, there was a 3.35 rise in identical sales from the previous year. The company also experienced a traffic-increase. To a certain degree, this was offset by less items being bought per shopping-trip. The FIFO gross-margins as calculated by the company were 20.46$. This was a drop of 11 basis-points from the previous year with the exclusion of fuel operations. The Kroger Co (NYSE:KR) took $13M in LIFO charges in comparison with the $35M million charge in the previous year.

There was a drop of 17 basis-points in general, operating and administrative costs with the exclusion of fuel-operations. This was a result of the strong sales-leverage. As a result of this, the operating-margins rose a wee bit to 2.6 percent as there was a 1.4% improvement in net margins. The company sees its full-year earnings of $2.73-$2.80/share as being in line with its long-term earnings growth-rate of 8%-11%.


About Nathan Alexander

Nathan Alexander holds bachelor’s degrees in Journalism and European Studies from Boston University. Nathan reports round up the day’s business and financial market news and include keynote interviews with major business players and updates on Asian, European and US stock markets. He has interviewed heads of leading European banking institutions such as European Central Bank President Jean-Claude Trichet and HSBC Chairman Stephen Green, and CEOs from the business world including Microsoft founder Bill Gates, Virgin Chairman Sir Richard Branson and former Porsche President and CEO Dr Wendelin Wiedeking.

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