Grocery Chain’s Shares Hit ‘Fresh’ New 52-Week High

Source: Streetwise Reports   03/03/2022

Shares of The Kroger Co. traded 11.6% higher after the company reported Q4/21 and FY/21 financial results that included a two-year stack growth rate of 113% in Digital Sales.

Supermarket chain operator The Kroger Co. (KR:NYSE), today announced fourth quarter and full year 2021 financial results for the period ended January 29, 2022.

The company reported that company sales in Q4/21 totaled $33.0 billion, compared to $30.7 billion in Q4/20. The firm noted that excluding fuel sales, year-over year sales in Q4/21 increased by 3.7% over Q4/20.

The company indicated that in Q4/21 it posted earnings per share (EPS) of $0.75 and adjusted EPS of $0.91, compared to EPS of $(0.10) and adjusted EPS of $0.81 in Q4/20.

The company’s Chairman and CEO Rodney McMullen remarked, “Our strategy of leading with fresh and accelerating with digital propelled Kroger to record performance in 2021, on top of record results in 2020.”

“We remain confident in our growth model and our ability to deliver total shareholder returns of 8% to 11% over time,” McMullen added.

Kroger stated that for FY/21 it had total of $137.9 billion, compared to $132.5 billion in FY/20, adding that total sales excluding fuel sales were up 0.2% y-o-y.

The company stated that for FY/21 it recorded earnings per share (EPS) of $2.17 and adjusted EPS of $3.68, versus EPS of $3.27 and adjusted EPS of $3.47 during FY/20.

The firm indicated that in FY/21 operating profit totaled $3.5 billion and adjusted FIFO operating profit was $4.3billion, compared to $2.8 billion and $4.1 billion, respectively in FY/20.

The company indicated that it repurchased $1.6 billion of its common shares in 2021 and increased its yearly dividend (paid quarterly) by 17% to $0.84 per share.

Kroger’s CFO Gary Millerchip provided some forward guidance and advised that, “We expect to grow identical sales without fuel by 2.0% to 3.0% and grow adjusted net earnings per share to between $3.75 to $3.85.”

CFO Millerchip added, “We remain confident in our ability to achieve attractive and sustainable total shareholder returns of 8-11% over time.”

The company highlighted that in Q4/21 it continued with the implementation of its “in-store End-to-End Fresh initiative” with the goal of bringing more days of fresh to customers.

The firm noted that it launched 72 new items under its store brands in the latest quarter with many of them geared towards delivering easy food at home meal solutions.

In addition, the company said that it has finished converting specialty cheese shops in 260 of its stores under the Murray’s Cheese brand.

The firm stated that it also expanded its distribution capacity by opening a customer fulfillment center in Forest Park, Ga. along with a cross-dock spoke facility near Indianapolis, Ind. The company advised that going forward it plans to further develop customer fulfillment centers in Cleveland, Ohio and North Carolina and intends to open a new cross-dock spoke facility in Oklahoma City, Okla.

The Kroger Co. is based in Cincinnati, Ohio and operates approximately 2,750 grocery retail stores, 2,256 pharmacies, 170 fine jewelry stores, 1,585 supermarket fuel convenience centers and 35 food production or manufacturing facilities throughout the U.S. The company employs approximately 500,000 people who are paid an average hourly wage of $17, equal to $22 per hour when benefits are included. The firm serves over 11 million customers daily at its stores.

Kroger started the day with a market cap of around $36.3 billion with approximately 735.3 million shares outstanding and a short interest of about 4.7%. KR shares opened nearly 6% higher today at $52.25 (+$2.88, +5.83%) over yesterday’s $49.37 closing price and reached a new 52-week high price this morning of $55.50. The stock has traded today between $52.25 and $55.50 per share and closed for trading at $55.13 (+$5.76, +11.67%).

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