Kroger reports EPS in-line, misses on comps; lowers FY17 EPS; sees FY18 EPS below long term target/consensus :
- Q3 EPS $0.41 vs. $0.41 CIQ Consensus; revenue +6% to $26.6 bln vs. $26.33 bln consensus. Total sales, excluding fuel, increased 7.1% in the third quarter compared to the same period last year. Total supermarket sales, excluding fuel and Roundy's, increased 1.6% in the third quarter compared to the same period last year.
- ID sales +0.1% ex-fuel, below +0.5% estimates; -0.2% including fuel.
- Kroger's adjusted net earnings guidance range per diluted share for 2016 is $2.10 to $2.15 vs. $2.13 consensus, which excludes the $0.07 charge from the company's commitment to restructure certain multi-employer pension obligations in the second quarter. The previous adjusted guidance range was $2.10 to $2.20.
- The company is completing its business plan process for 2017 and will provide specific 2017 guidance in March. Kroger anticipates both positive identical supermarket sales and net earnings per diluted share growth, excluding the 53rd week (consensus +7% to). Net earnings growth will likely be below the low end of the company's 8 - 11% net earnings per diluted share long-term growth rate guidance. Kroger expects the operating environment in the first half of 2017 to be similar to today. The second half of 2017 should show improvement as the company cycles the current environment.
- Over the long term, Kroger is committed to achieving a net earnings per diluted share growth rate of 8 -- 11%, plus a growing dividend.
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