Kroger posts positive Q2 comps in 'deflationary environment'

CINCINNATI - Kroger on Friday reported net earnings of $383 million, or $0.40 per diluted share, and identical supermarket sales growth, without fuel, of 1.7% in the second quarter of 2016 ending Aug. 13.



"I'm very proud of our associates for their determined focus on always making a difference for our customers. Their execution of our Customer 1st Strategy in a deflationary environment helped deliver growth in identical store sales, units and market share," stated Rodney McMullen, Kroger chairman and CEO. "We are focused on long-term performance over a three-to-five year horizon. We have the right strategy, the right people, and the financial flexibility to execute our strategy, which allows us to continue investing in our associates and our business and growing market share. By staying on our strategy, we create long-term value for our shareholders."



Total sales for the quarter increased 4% to $26.6 billion, while total sales excluding fuel increased 7.3% in the second quarter compared to the same period last year.



As a result of continued deflation, Kroger lowered its net earnings guidance range to $2.03 to $2.13 per diluted share for 2016. For identical supermarket sales growth, excluding fuel, the company expects the remainder of 2016 to be in the 0.5% to 1.5% range, which is 1.4% to 1.8% for the full year.



The company lowered expected capital investments – excluding mergers, acquisitions and purchases of leased facilities – to $3.6 to $3.9 billion for the year. The previous expectation was $4.1 to $4.4 billion.