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CINCINNATI — Kroger Co. posted solid sales gains in its fourth quarter as customers continued to prepare and eat meals at home.
Earnings exceeded projections despite higher supply chain costs, the company said earlier this month.
Kroger revised its full-year adjusted earnings forecast to $3.40 to $3.50 a share from an earlier projection of $3.25 to $3.35 a share.
“As we look to 2022, we expect the momentum in our business to continue and have confidence in our ability to navigate a rapidly changing operating environment,” Rodney McMullen, Kroger’s chairman and chief executive officer, said in an earnings statement. “We are leveraging technology, innovation and our competitive moats to build lasting competitive advantages. Our balanced model is allowing us to deliver for shareholders, invest in our associates, continue to provide fresh affordable food to our customers and uplift our communities. We remain confident in our growth model and our ability to deliver total shareholder returns of 8% to 11% over time.”
Fourth quarter sales, excluding fuel, were up 3.7% from a year earlier. Identical sales without fuel increased 4%, exceeding expectations for a 2.8% rise, and were up 14.6% on a two-year stack basis. Digital sales on a two-year stack grew 105%.
Adjusted earnings per share of 91 cents also beat expectations.
For the full year through January, Kroger reported identical sales without fuel increased 0.2%, and were up 14.3% on a two-year stack basis. Kroger reported a fiscal 2021 operating profit of $3.5 billion on total sales of $138 billion, up from $132.5 billion the previous year.
“Kroger’s 2021 results demonstrate the strength of our value creation model, and in 2022 we expect to build on this momentum,” said McMullen, who noted that the company expects identical sales growth of between 2% and 3% this year.
Kroger this month also announced it was entering the Austin, Texas, market with a new e-commerce delivery service, despite not operating any stores in the city. The company said it will build a 70,000-square-foot facility in Texas’ capital city that is expected to launch this year and will be powered by a fulfillment center in Dallas. The service is part of a partnership between Kroger and U.K.-based Ocado Group. Kroger is also expanding delivery services in San Antonio, Texas, and Birmingham, Ala.
