Kroger pointed to pricing pressures and a sluggish consumer in a challenging but still positive third quarter.
The Kroger Co. has posted net earnings of $391 million, or 41 cents per diluted share, for the third quarter ended November 5, versus net earnings of $428 million, or 43 cents per diluted share, in the year-earlier period. Kroger’s earnings per share matched a MarketBeat-published analyst average estimate.
Identical store sales growth, excluding fuel, was 0.1% in the third quarter versus the 2015 period. Total sales advanced 5.9% to $26.6 billion in the quarter versus the period a year previous. Total sales, excluding fuel, increased 7.1% versus the quarter a year before. Total supermarket sales, excluding fuel and contribution from the recently acquired Roundy’s chain, increased 1.6% .
In a conference call, Kroger chairman and CEO, Rodney McMullen, identified a significant episode of deflation as suppressing Kroger results as well as sluggish consumer spending prompted by concerns about issues such as health care. However, he added that Kroger efforts to leverage its loyalty and technology initiatives including the growing ClickList order at home and pick-up at the store program have helped the supermarket operator develop a closer connection with customers.
McMullen, said, “Deflation persisted as we expected during the quarter. We are firmly focused on our long-term strategy of improving our connection with customers and associates, and continue working on process changes to lower costs. We don’t change our strategy based on quarterly swings in results. We remain committed to delivering on our long-term earnings per share growth rate guidance.”
Kroger operates 2,796 retail food stores, many with extensive general merchandise operations, under its own and a variety of other local banners in 35 states and the District of Columbia.
