Kroger Reports Earnings Beat, Revenue Miss; Lowers Full-Year Guidance on Deflationary Environment (NYSE:KR)


The Kroger Company (NYSE:KR) reported second-quarter earnings that beat expectations and revenues that missed in a quarterly report on Friday. The company said earnings came in at $0.47 a share, not including the effect of pension restructuring, beating estimates from Capital IQ for $0.45 and last year’s $0.44 a share. Including the charge, earnings totaled $0.40 a share.

Revenues for the quarter totaled $26.6 billion, compared to $25.5 billion in the year-ago period, but short of the analyst forecast of $26.7 billion. The company also lowered its 2016 adjusted net earnings guidance range per diluted share to $2.10 to $2.20, from $2.19 to $2.28. Total sales in the quarter rose 4% to $26.6 billion from the same timeframe a year earlier.

Excluding fuel, sales increased 7.3%. Operating expenses, meanwhile, fell 6 basis points as a percent of sales versus the prior year, the company said. Kroger in the past year has repurchased $1.1 billion in common shares, paid $406 million in dividends, invested $3.8 billion and merged with Roundy’s at a cost of $866 million. The company said it lowered its guidance for the full year thanks to continued deflation. Sales growth, excluding fuel, is forecast to be from 1.4% to 1.8% for the full year. Capital investments excluding mergers, acquisitions and purchases of leased facilities will total $3.6 billion to $3.9 billion in 2016, down from prior guidance of $4.1 billion to $4.4 billion.

The stock increased 0.19% or $0.06 during the last trading session, hitting $30.95. About 14.35M shares traded hands or 29.86% up from the average. Kroger Co (NYSE:KR) has declined 16.11% since February 8, 2016 and is downtrending. It has underperformed by 32.59% the S&P500.

The Kroger Co. operates retail food and drug stores, multi-department stores, jewelry stores and convenience stores across the United States. The company has a market cap of $28.79 billion. The Firm also makes and processes food for sale in its supermarkets. It has a 14.46 P/E ratio. It operates through retail activities segment.

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