On December 1st The Kroger Company (KR) posted results for Q3 of FY2022 ending November 5th.  Kroger is the second largest retailer of groceries in the U.S. and is a pure supermarket play subject to the pressures of an escalation in food costs, logistics and labor and the impact of inflation in common with national and regional competitors. Kroger has announced the intention of acquiring competitor Albertsons Cos. Creating an enterprise with 5,000 stores subject to federal approval.

 For the quarter, Kroger earned $398 million on revenue of $34,198 million with an EPS of $0.55.  For the corresponding Q3 of FY2021, Kroger earned $483 million on sales of $31,860 million with an EPS of $0.64.  Revenue was 7.3 percent higher but gross margin decreased by 1.8 percent to 21.3 percent compared to Q3 2021. Operating margin declined 3.1 percent to $841 million for Q3 2022.

In commenting on quarterly results, Rodney McMullen CEO stated, "Kroger achieved strong results in the third quarter as we continue to execute our Leading with Fresh and Accelerating with Digital strategy. Our associates are doing an outstanding job delivering a full, fresh and friendly experience across our seamless store and digital ecosystem.

Kroger's value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted Our Brands products and an industry-leading fuel rewards program, is resonating with shoppers and driving increased customer loyalty.

This quarter demonstrates the strength of our approach to growing our business. By delivering for our customers, investing in our associates and supporting our communities, we are creating attractive and sustainable total returns for our shareholders."

The Company release included FY 2022 Guidance:- 

• Identical Sales growth of 5.1 to 5.3 percent 
• Adjusted EPS of $4.05 to $4.15 
• Adjusted Operating Profit of $4.8 billion to $4.9 billion
• Capital expenditure of $3,200 to $3,400 million
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Comparable same-store sales for Q3 increased by 6.9 percent (excluding fuel) compared to Q3 FY 2021. “Our Brands” increased by 10.4 percent and digital sales were up by 10.0 percent.

On November 5th Kroger posted total assets of $49,987 million of which $3,982 million comprised goodwill and intangibles. Long-term debt and lease obligations attained $20,432 million.  

At the end of FY2021, Target Corporation operated 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 four Ocado fully automated fulfillment centers with as many as twenty planned.

The Kroger Company had an intraday market capitalization of $35,100 million on December 1st 2022.  The Company has traded over the past fifty-two weeks in a range of $41.73 to $62.78 with a 50-day moving average of $45.90. KR trades with a forward P/E of 11.9. On November 30th the share closed at $49.21 but after the release fell on the open but attained $49.10 at 13H00 on December 1st.

Twelve-month trailing operating margin was 3.0 percent and profit margin 1.7 percent.  The Company generated a return on assets of 5.6 percent and 25.9 percent on equity.