Kroger (KR) Reports In-Line Q1 EPS, Lowers FY EPS Guidance

Kroger (NYSE: KR) reported Q1 EPS of $0.58, in-line with the analyst estimate of $0.58. Revenue for the quarter came in at $36.3 billion versus the consensus estimate of $35.77 billion.

Chairman and CEO Rodney McMullen said, "We remain focused on our strategy. This will make a difference for our customers and create value for our shareholders. We are running the business with an eye toward where the customer is going. Customers tell us they want to connect with us in multiple ways with the help of friendly associates to easily provide meals to their families at prices that enable them to stretch their budgets. We are committed to providing that experience, and we will not lose on price.

"We are driving our strategy of lowering costs to reinvest in ways that provide the right value to our customers. We're pleased that identical supermarket sales in the last nine weeks of the first quarter were positive, and that has continued in the second quarter to date."

GUIDANCE:

Kroger sees FY2017 EPS of $2.00-$2.05, versus the consensus of $2.21.

• Kroger lowered its 2017 GAAP net earnings guidance for 53 weeks to $1.74-$1.79 per diluted share. Kroger's adjusted net earnings guidance range is $2.00 to $2.05 per diluted share. This assumes an $80 million LIFO charge compared to the company's original estimate of $25 million. The previous adjusted net earnings guidance range was $2.21 to $2.25 per diluted share. See Form 8-K for additional information on guidance.
• Kroger continues to expect identical supermarket sales growth, excluding fuel, of flat to 1% growth for 2017.
• The company continues to expect capital investments excluding mergers, acquisitions and purchases of leased facilities, to be in the $3.2 to $3.5 billion range for 2017.
• Over the long term, Kroger is committed to achieving a net earnings per diluted share growth rate of 8 – 11%, plus a growing dividend.

For earnings history and earnings-related data on Kroger (KR) click here.

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