Kroger sales, earnings drop in Q4; names new CFO

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Kroger sales, earnings drop in Q4; names new CFO

By David Salazar - 03/07/2019
Kroger on Thursday shared its fourth-quarter and full-year 2018 sales results, marking a decline in sales and earnings in Q4 even as its digital sales increased and its pickup and delivery options gained household penetration.

In the fourth quarter, Kroger’s sales declined 9.5% to $18.1 billion, compared with $31 billion in the prior-year period. Net income was reported to be $259 million, or 32 cents per share, compared with $854 million in income in the year-ago quarter — 96 cents per share. Adjusted earnings for the quarter were 48 cents per share, or $390 million, down from 54 cents a share and $483 million in Q4 2017.

For the fiscal year, Kroger posted earnings per share of $3.76, or roughly $3.1 billion. It noted that its full-year adjusted earnings ($1.7 billion, or $2.11 per share) were ahead of its internal expectations, attributing them to changes associated with its Restock Kroger plan. Total sales dipped 1.2% to $121.2 billion. Excepting the year’s 53rd week, the divestiture of its convenience store business and its merger with Home Chef, sales increased 2% in 2018, the company said.

Among the high points of 2018, Kroger identified its partnerships — including its pilot with Walgreens — as well as growth in its private-label brands unit, $1 billion in cost savings through process improvements and a 58% uptick in digital sales. The company also noted that its pickup and delivery options had reached 91% of Kroger households.

Alongside its results, Kroger announced the promotion of Gary Millerchip to the role of senior vice president and CFO, effective April 4, as well as the retirement of executive vice president and CFO Mike Schlotman at the end of 2019. Schlotman will remain CFO until April 3, after which he will stay on as executive vice president and a member of the senior leadership team until Dec. 28 to support the company during the transition period. The company highlighted this transition plan — as well as its recently announced transition plan for its chief digital officer and its creation of the role of senior vice president of alternative business — as part of its history planning for succession and talent development.