[ACCESSWIRE]
Upcoming AWS Coverage on Smart & Final Stores Post-Earnings Results
LONDON, UK / ACCESSWIRE / March 20, 2017 / Active Wall St. announces its post-earnings coverage on The Kroger Co. (NYSE: KR) as the Company disclosed its fourth quarter fiscal 2016 (Q4 FY16) and full year fiscal 2016 (FY16) on March 02, 2017. The Cincinnati, Ohio-based Company's quarterly total sales increased 5.5% y-o-y, beating market consensus estimates. Register with us now for your free membership at:
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One of Kroger's competitors within the Grocery Stores space, Smart & Final Stores, Inc. (NYSE: SFS), reported on March 08, 2017, its financial results for the fiscal fourth quarter and full year ended January 01, 2017. AWS will be initiating a research report on Smart & Final Stores in the coming days.
Today, AWS is promoting its earnings coverage on KR; touching on SFS. Get our free coverage by signing up to:
http://www.activewallst.com/register/
Earnings Reviewed
In Q4 FY16, Kroger's reported total sales of $27.61 billion compared to $26.17 billion in Q4 FY15. Total sales number for the reported quarter topped market expectations of $27.36 billion. The Company's total sales, excluding fuel, increased 4.4% y-o-y in Q4 FY16. The Company attributed this growth in total sales to recent mergers with Roundy's and ModernHEALTH.
The grocery chain reported net earnings attributable to Kroger of $506 million, or $0.53 per diluted shares in Q4 FY16 compared to $559 million, or $0.57 per diluted share, in the prior year's comparable quarter. Moreover, Wall Street net earnings expected matched the Company's reported earnings for the reported quarter.
For full-year FY16, Kroger's total sales stood at $115.34 billion, rising 5.0% from $109.83 billion in the previous year. Meanwhile, the Company's total sales, excluding fuel were up by 6.7% y-o-y in FY16. The Company reported net earnings attributable to Kroger of $1.98 billion, or $2.05 per diluted share, in FY16. Excluding the restructuring of certain multi-employer pension obligations, the Company's adjusted net earnings for FY16 came in at $2.05 billion, or $2.12 per diluted share. Furthermore, the Company had reported net earnings attributable to Kroger of $2.04 billion, or $2.06 per diluted share, in FY15
Operating Metrics
In the reported quarter, Kroger's reported gross margin of 22.2% of sales. Moreover, excluding fuel, recent mergers and the LIFO charge, gross margin was down by 22 basis points y-o-y. The Company's operating, general, and administrative expenses for Q4 FY16 came in at $4.48 billion, or 16.2% of total sales, versus $4.36 billion, or 16.6% of total sales, in the previous year's comparable quarter.
Meanwhile, Kroger's Q4 FY16 operating profit fell to $858 million, or 3.1% of total sales, from $928 million, or 3.6% of total sales, in Q4 FY15. The Company's net earnings before income tax expense came in at $732 million, or 2.7% of total sales in Q4 FY16 compared to $815 million, or 3.1% of total sales, in the prior year's comparable quarter.
Cash Flow and Balance Sheet
In the year ended January 28, 2017, net cash provided by operating activities was $4.27 billion compared to $4.92 billion in FY15. The Company spent $3.6 billion on capital investments, excluding mergers, acquisitions, and purchases of leased facilities in FY16 compared to $3.3 billion in FY15.
As on January 28, 2017, the Company had $310 million in cash compared to a cash balance of $277 million as on January 30, 2016. The Company reported long-term debt of $11.83 billion in its books of accounts as on January 28, 2017, which was an increase from $9.71 billion as on January 30, 2016.
The Company's net total debt to adjusted EBITDA ratio was 2.31 as on January 28, 2017, compared to 2.08 as on January 30, 2016. Furthermore, the Company's return on invested capital as on January 28, 2017, came in at 13.09% versus 13.93% as on January 30, 2016.
Dividend and Share Repurchases
In a separate press release on March 09, 2017, Kroger's Board of Directors declared a quarterly dividend of $0.12 per share, payable on June 01, 2017, to shareholders of record as of the close of business on May 15, 2017. Additionally, the Company announced an incremental $500 million share repurchase program, supplementing the current share repurchase authorization, which has approximately $120 million remaining as of March 08, 2017.
During FY16, Kroger's repurchased stock worth $1.8 billion and paid dividends amounting to $429 million.
Earnings Outlook
In its guidance for full year FY17, Kroger expects identical supermarket sales and excluding fuel, sales growth to be in the range of flat to 1%. Furthermore, the Company projects net earnings for FY17 to be in the range of $2.21 to $2.25 per diluted share, including an estimated $0.09 for the 53rd week.
Stock Performance
At the close of trading session on Friday, March 17, 2017, Kroger's stock price slightly rose 0.78% to end the day at $29.55. A total volume of 22.18 million shares were exchanged during the session, which was above the 3-month average volume of 7.94 million shares. The Company's shares are trading at a PE ratio of 14.41 and have a dividend yield of 1.62%. The stock currently has a market cap of $27.72 billion.
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