Kroger's (KR) Q2 Earnings Top Estimates, Digital Sales Soar
Zacks Investment Research | Sep 11, 2019 11:01PM ET
The Kroger Co. (NYSE:KR) reported second-quarter fiscal 2019 results, wherein both the top and the bottom lines improved year over year. Although total sales came below the Zacks Consensus Estimate, earnings per share surpassed the same for the second successive quarter. Management reiterated the forecast for fiscal 2019.
Let’s Introspect
The company delivered adjusted earnings of 44 cents a share that came ahead of the Zacks Consensus Estimate of 41 cents and increased 7.3% from 41 cents reported in the prior-year quarter. This Cincinnati, OH-based company continues to envision fiscal 2019 net earnings in the band of $2.15-$2.25 per share, which indicates an improvement over adjusted earnings of $2.11 per share reported in fiscal 2018.
Total sales of $28,168 million came below the Zacks Consensus Estimate of $28,398 million but increased marginally by 0.5% from the prior-year quarter. Excluding fuel, dispositions and merger transactions, top line improved 2.5% from the year-ago period. The company’s digital sales surged 31%, while identical sales, excluding fuel, grew 2.2%.Management reaffirms identical sales growth forecast of 2-2.25% in fiscal 2019.
We note that gross margin increased 30 basis points to 21.9%, after expanding 20 basis points in the preceding quarter. FIFO gross margin, excluding fuel, shrunk 29 basis points from the year-ago period, mainly due to industry-wide lower gross margin rates in pharmacy. Adjusted FIFO operating profit rose 10.6% to $626 million. Kroger anticipates adjusted operating profit in the band of $2.9-$3 billion.
The Kroger Co. Price, Consensus and EPS Surprise
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