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Kroger Earnings Positve but Shares Trading Lower

In early Thursday trading shares of The Kroger Co. (NYSE: KR) are trading down about 1.6 percent after the company reported fiscal first quarter earnings that were above expectations. The Cincinnati-based supermarket chain reported EPS of $0.92 versus consensus of $0.88–a year over year increase of 9.5 percent. Revenue was slightly low at $30.04 billion versus a forecast of $30.2 billion but still a year over year gain of 3.37 percent.

According to the release, “Kroger achieved strong sales and record earnings per share for the quarter, and our customers’ positive view of us continues to improve,” said David B. Dillon, Kroger’s chairman and chief executive officer. “This is because of our continued focus on the Customer 1st strategy. Our first quarter results give us the confidence to raise our guidance for the year.”

The results are especially positive given the increased competition from big-box retailers like Target (NYSE: TGT), and Walmart (NYSE: WMT).

Total net debt stood at $7.9 billion, an increase of $160 million from one year ago but its debt to adjust EBITDA ratio was 1.85 compared to 1.91 during the same period one year ago.

The company increased its net earnings guidance to $2.73 to $2.80 per diluted share for fiscal 2013. That is slightly higher than original guidance that the company reported as $2.71 to $2.79.

“The Kroger team’s relentless focus on delivering on our Customer 1st strategy, quarter after quarter, continues to set us apart,” Mr. Dillon said. “We will continue to build on this strong momentum to drive growth and greater shareholder value.”

Disclosure: At the time of this writing, the author had no position in the above mentioned stocks.

[stock-tools exchange="NYSE" symbol="KR" image_height="230" image_width="350"]

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