The Kroger Co. has reported its 45th consecutive quarter of positive identical supermarket sales growth, excluding fuel—as the grocer reported its fourth quarter and fiscal year 2014 results on Thursday. The company reported fourth quarter identical supermarket sales growth, without fuel, of 6.0 percent.
“2014 was an outstanding year by all measures,” said Kroger Chairman and CEO Rodney McMullen. “Kroger captured more share of the massive food market, delivered on our commitments and invested to grow our business.
“While improved fuel margins contributed to our results in the second half of the year, our core operating performance without fuel shows that our associates are improving our relationship with customers in ways that grow loyalty and generate strong shareholder returns.
“Kroger’s consistent Customer 1st performance is expanding our business, creating opportunity for associates and generating value for our shareholders,” he added. “We created nearly 25,000 new jobs last year, and I am especially proud that our commitment to hiring veterans resulted in more than 6,000 veterans joining our company last year.”
Fourth quarter 2014 results
Kroger’s operating results include Harris Teeter in fourth quarter and fiscal 2014 but not fourth quarter and fiscal 2013, which affects year-over-year comparisons, according to the Cincinnati-based grocer.
Kroger reported total sales of $25.2 billion in the fourth quarter, which ended Jan. 31, 2015. Total sales increased by 8.5 percent. Total sales excluding fuel increased by 14.2 percent.
Net earnings for the fourth quarter totaled $518 million, or $1.04 per diluted share.
Fiscal year 2014 results
Kroger reported total sales of $108.5 billion in 2014, an increase of 10.3 percent. Total sales excluding fuel increased 12.9 percent over the prior year.
Net earnings for 2014 totaled $1.73 billion, or $3.44 per diluted share. Excluding the 2014 adjustment items, adjusted net earnings for fiscal 2014 totaled $1.77 billion, or $3.52 per diluted share.
Looking ahead, Kroger anticipates identical supermarket sales growth, excluding fuel, of approximately 3.0 to 4.0 percent for 2015. This range takes into account the expectation of lower inflation during the year, the company says.
Full-year net earnings for 2015 are expected to range from $3.80 to $3.90 per diluted share. This is consistent with the company’s long-term net earnings per diluted share growth rate of 8 to 11 percent, growing off of 2014 adjusted earnings of $3.52 per diluted share. Shareholder return will be further enhanced by a dividend which is expected to increase over time.
For 2015, Kroger expects fuel margins to return to historical averages, a lower LIFO charge, and no comparable contributions to the pension and foundation; as a result, the company expects to achieve near the middle of the guidance range.
The company expects capital investments, excluding mergers, acquisitions and purchases of leased facilities, to be in the $3.0 to $3.3 billion range for 2015.
