Kroger Company KR reported second-quarter adjusted earnings per share of 93 cents, beating the analyst consensus estimate of 91 cents.

Quarterly sales of $33.912 billion (nearly flat year over year) missed the street view of $34.090 billion. Excluding fuel, sales increased 1.3% compared to the same period last year.

Kroger’s results show a 1.2% increase in identical sales excluding fuel, an operating profit of $815 million, and an adjusted FIFO operating profit of $984 million.

“We are growing households and increasing customer visits by offering a compelling combination of affordable prices and personalized promotions on great quality products, all through a unique seamless experience,” said  CEO Rodney McMullen. 

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The company achieved strong adjusted free cash flow and successfully executed its go-to-market strategy to deliver value to customers. Digital sales grew by 11%, and there was an increase in total households, customer visits, and loyal households.

Kroger exited the quarter with cash and temporary cash investments of $2.8 billion, with inventories of $6.64 billion.

The company’s long-term debt, including obligations under finance leases, totaled $12.034 billion.

Kroger’s net total debt to adjusted EBITDA ratio is 1.24 compared to 1.31 a year ago. The company’s net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50.

Outlook: Kroger has affirmed its fiscal year 2024 adjusted EPS outlook, projecting a range of $4.30 to $4.50, compared to the $4.44 estimate.

“Our solid sales results through the first two quarters of the year give us the confidence to raise the low end of our full-year identical sales without fuel guidance by 50 basis points,” said Interim CFO Todd Foley.

The company now expects identical sales without fuel of 0.75% to 1.75% (prior view: 0.25% to 1.75%).

Price Action: KR shares are trading higher by 1.20% to $52.12 premarket at last check Thursday.

Photo via Shutterstock

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