Kroger fourth quarter earnings drop

Posted 2:25PM on Tuesday 12th March 2002 ( 23 years ago )

CINCINNATI - The Kroger Co. said Tuesday its fourth quarter earnings were about 5 percent lower than a year ago, hurt by restructuring charges, a weakened economy and competition. The nation's largest supermarket operator earned $350.4 million, or 43 cents per share, for the three months ended Feb. 2 compared with $367.9 million, or 47 cents per share, a year ago. Excluding merger and other expenses of $32.8 million, Kroger's earnings were 47 cents a share, matching the consensus forecast of analysts surveyed by Thomson Financial/First Call. Fourth-quarter sales declined to $12.1 billion from $12.7 billion a year ago. Kroger's stock was off 41 cents at $22.14 in midday trading on the New York Stock Exchange. The company has been realigning its operations since a 1999 merger with Fred Meyer Inc., the food retailer based in Portland, Ore. Corporate brand sales and productivity programs helped Kroger overcome sales losses caused by competitors and the sluggish economy, said Joseph Pichler, chairman and chief executive. For all of fiscal 2001, Kroger earned $1.04 billion, or $1.26 per share, compared with $876.9 million, or $1.04 a share, a year earlier. Sales totaled $50.1 billion, up from $49 billion for 2000. Kroger still expects to increase its annual earnings per share by 10 percent to 12 percent in both fiscal 2002 and 2003, before one-time expenses are factored in, Pichler said. The company's target for those earnings beginning in fiscal 2004 is a 13 percent to 15 percent annual increase, he said. Kroger also is going ahead with plans to centralize merchandising and procurement operations in efforts to reduce product costs. Kroger expects by the end of this year to achieve two-thirds of the anticipated $500 million reduction in annual administrative and operating costs, Pichler said. The company operates 2,418 supermarkets and multidepartment stores in 32 states under approximately two dozen names, including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's and Fry's Marketplace, Dillon, QFC and City Market. Kroger also operates 789 convenience stores, 427 jewelry stores, 227 supermarket fuel centers and 41 food processing plants.

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