You are here
CINCINNATI - The Kroger Co., the largest U.S. supermarket chain, reported higher quarterly earnings despite cutting prices to compete with rivals such as Wal-Mart Stores Inc.
Kroger reported net income of $351.5 million, or 46 cents per diluted share, for the fiscal first quarter ended May 24, up 40 cents per share higher from $321.7 million a year earlier.
Total sales for Kroger's fiscal 2003 first quarter increased 3.8 percent to $16.3 billion while total food store sales rose 3.5 percent. Same store food sales, including fuel, declined 0.1 percent, while identical food store sales, excluding fuel, decreased 1.1 percent.
Comparable food store sales, which include relocations and expansions, increased 0.7 percent for the quarter while comparable food store sales, excluding fuel, declined 0.5 percent. Kroger estimates that its product costs, including fuel, were flat. Excluding fuel, product cost deflation was negative 0.5 percent in the quarter.
The company said strong cash flow enabled it to repurchase $761 million of stock, reduce net total debt by $325 million, and invest $2.0 billion in capital projects over past four quarters.
"We are pleased with our sales and earnings performance in the first quarter, especially in the light of continued economic uncertainty, high unemployment, and intense competition," said Joseph A. Pichler, Kroger chairman and CEO. Calling its 19-month old strategic growth plan "the appropriate response to this economic and competitive environment," Pichler says the company believes the continued enhancement of the plan "will improve our competitive price position in selected categories and markets as we offer even better value to our customers."
Pichler says the company expects to exceed the plan's original goal of $500 million in cost savings by the end of 2003. Through the end of the first quarter, he said Kroger had achieved savings of $377 million.