On March 3rd The Kroger Company (KR) posted results for Q4 and FY2021 ending January 29th. Kroger is the second largest retailer of groceries in the U.S. and is a pure supermarket play subject to the pressures of COVID, escalation in food, logistic and labor costs in common with national and regional competitors.
For the quarter, the company earned $569 million on revenue of $33,048 million with a diluted EPS of $0.75. For the corresponding Q4 of FY2020, Kroger lost $(77) million on sales of $23,691 million with a diluted EPS of $(0.10). Revenue was 8.6 percent higher and gross margin increased by 0.9 percent.
For fiscal 2021, the Company posted net earnings of $1,655 million on revenue of $137,900 million with a diluted EPS of $2.17. For fiscal 2020, Kroger posted net earnings of $2,585 million on revenue of $132,498 million with a diluted EPS of $3.27.
In commenting on FY 2021 results, Rodney McMullen CEO stated, “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 are incredibly proud of our Associates who continue to deliver for our customers through the pandemic.
He added "As we look to 2022, we expect the momentum in our business to continue and have confidence in our ability to navigate a rapidly changing operating environment. We are leveraging technology, innovation and our competitive advantages. Our balanced model is allowing us to deliver for shareholders, invest in our Associates, continue to provide fresh affordable food to our customers and uplift our communities”.
McMullen concluded, "We remain confident in our growth model and our ability to deliver total shareholder returns of 8% to 11% over time."
The Company release included FY 2022 Guidance:-
- Identical Sales growth without fuel of 2.0% to 3.0%
- Adjusted EPS of $3.75 to $3.85
- Adjusted FIFO Operating Profit of $4.2 billion to $4.3 billion
Comparable same-store sales for Q4 increased by 4.0 percent (excluding fuel) compared to Q4 FY 2020. During Q4 of FY 2021 digital sales increased by 105 percent as a two-year stack.
On January 29th Kroger posted total assets of $49,086 million, up 0.9 percent from the end of FY2020. Long-term debt and lease obligations attained $21,294 million, 1.7 percent lower than at the end of the previous fiscal year.
At the end of FY2021, Target Corporation operated approximately 2,750 stores with 2,255 pharmacies, under 25 banners in 35 states and D.C. Kroger operates 34 food plants and 45 distribution centers with three Ocado fully automated fulfillment centers with as many as twenty planned.
The Kroger Company had an intraday market capitalization of $3,416 million on March 3rd. The Company has traded over the past fifty-two weeks in a range of $34.13 to $55.50 with a 50-day moving average of $45.87. KR trades with a forward P/E of 13.6. On March 2nd the share closed at $49.38 but after the release opened at $53.89 on March 3rd.
Twelve-month trailing operating margin was 2.0 percent and profit margin 0.8 percent. The Company generated a return on assets of 3.4 percent and 10.5 percent on equity.