Kroger reports third-quarter results

CINCINNATI Cincinnati-based grocer chain Kroger reported a net loss for the third quarter of $874.9 million, or $1.35 per diluted share, the company reported Tuesday.

These results include noncash asset impairment charges totaling $1.05 billion, after-tax, that primarily resulted from a goodwill write-down at the company's Ralphs division in southern California, the company noted in a release. Excluding these impairment charges, net earnings for the quarter would have been $176.7 million, or 27 cents per diluted share. Net earnings in the same period last year were $237.7 million, or 36 cents per diluted share.

The silver lining, however, is that Kroger reported that its same-store sales for third quarter 2009 increased 1.3%. Total sales, including fuel, in the third quarter were $17.7 billion, compared with $17.6 billion for the same period last year. Excluding fuel sales, total sales increased 2.2% over the prior-year period.

"The operating environment we saw during the third quarter was more challenging than we anticipated, obscuring some otherwise strong fundamentals in our performance such as exceptional tonnage growth, market share gains, increases in loyal household count, and good cost control. These fundamentals are important to our long-term success," said David Dillon, Kroger's chairman and CEO. "In the near-term, our financial results are being pressured by factors including persistent deflation, unusually intense competition and the cautious mindset of customers. We are making adjustments to balance the challenges of the current environment with Kroger's long-term objective for sustainable identical sales and earnings growth, which we believe will create value for shareholders."