Total sales declined by 1.2% to $37.25 billion, due to the sale of Kroger’s convenience store business unit. Total sales, excluding fuel and the effect of selling the convenience store business unit, increased 2% year-over-year.
Looking ahead into fiscal 2019, the company expects GAAP earnings in the range of $2.38 to $2.48 per share and adjusted earnings in the range of $2.15 to $2.25 per share. The FIFO operating profit is projected to be in the range of $2.9 billion to $3 billion.
Identical sales growth, excluding fuel, is predicted to be in the range of 2% to 2.25% in 2019. The company expects capital investments, excluding mergers, acquisitions, and purchases of leased facilities, to range between $3 billion and $3.2 billion.
Kroger’s financial strategy is to use its free cash flow to drive growth while also maintaining its current investment grade debt rating and returning capital to shareholders. The company actively balances the use of its cash flow to achieve goals.
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Over the last four quarters, Kroger has used cash to invest in Ocado securities and Home Chef, contribute to company-sponsored pension plans, repurchase 5 million common shares, pay $440 million in dividends, and invest in capital, excluding mergers, acquisitions, and purchases of leased facilities.
The company provided a Restock Kroger progress update on the company’s three-year transformation plan. The company’s Brands sales were up 3%, led by double-digit growth in Simple Truth after the launch of 219 new Brands items. It expanded to 1,685 Pickup locations and 2,126 Delivery locations, covering over 93% of Kroger households. The company introduced a test of new Home Chef retail meal solutions, including oven-ready options, Heat & Eat choices, and lunch kits.
Shares of Kroger ended Wednesday’s regular session down 1.25% at $23.64 on the NYSE. Following the earnings release, the stock declined by 1.44% in the premarket session.
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