Kroger (KR) Tops Q1 EPS by 3c; Comps Rose 5.7%

June 18, 2015 8:18 AM EDT

Kroger (NYSE: KR) reported Q1 EPS of $1.25, $0.03 better than the analyst estimate of $1.22. Revenue for the quarter came in at $33.1 billion versus the consensus estimate of $33.42 billion.

Comps rose 5.7%.

Financial Strategy

Kroger's long-term financial strategy continues to be to use cash flow from operations to repurchase shares, fund its dividend, increase capital investments, and maintain its current investment grade debt rating.

Kroger's strong financial position allowed the company to return more than $1.1 billion to shareholders through share buybacks and dividends over the last four quarters. During the first quarter, Kroger repurchased 8.0 million common shares for a total investment of $585 million.

Capital investments, excluding mergers, acquisitions and purchases of leased facilities, totaled $915 million for the first quarter, compared to $709 million for the same period last year.

The company's net total debt to adjusted EBITDA ratio decreased to 2.09, compared to 2.40 during the same period last year (see Table 5).

Fiscal 2015 Guidance

Kroger confirmed its net earnings guidance range of $3.80 to $3.90 per diluted share for fiscal 2015. This range is within the company's long-term net earnings per diluted share growth rate guidance of 8 – 11%, plus a growing dividend.

Kroger raised its identical supermarket sales growth guidance, excluding fuel, to a range of 3.5% to 4.5% for fiscal 2015. The original guidance was 3.0% to 4.0%.

The company continues to expect capital investments excluding mergers, acquisitions and purchases of leased facilities, to be in the $3.0 to $3.3 billion range for the year.

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

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