Kroger continued its strong sales and earnings trend, posting overall sales of $34.8 billion in its fourth quarter which ended December 31, 2022.
The Cincinnati-based supermarket chain also posted a same-store sales gain of 6.2 percent (excluding fuel), saw its digital sales grow by 12 percent and achieved a 10 percent increase in sales of its own brands in the 13-week period. On the earnings side of the balance sheet, operating profit was $826 million.
For its full fiscal year, Kroger’s overall sales increased from $137. 9 billion to $148.3 million and identical store revenue excluding fuel jumped 5.6 percent. The large chain’s operating profit was $4.1 billion up from $3.5 billion in fiscal 2021.
Chairman and CEO Rodney McMullen commented on the results, saying: “Kroger achieved exceptional results in 2022 as we executed on our ‘Leading With Fresh and Accelerating With Digital’ strategy, building on record years in 2020 and 2021.
“We appreciate our associates for remaining customer-focused, delivering the products customers want, when and how they want them, with zero compromise on quality, convenience and selection. Our associates enable our success, and we are committed to investing in theirs by continuing to improve wages, comprehensive benefits and career development opportunities.
“Providing affordable food is even more essential at a time when inflation is affecting so many of our customers’ lives. We do this by delivering fresh products at a great value, trusted ‘Our Brands’ items, and personalized promotions.
“Our proven go-to-market strategy enables Kroger to successfully navigate many operating environments. We believe that by delivering value for our customers, investing in our associates and serving our communities, Kroger will continue to achieve attractive and sustainable total returns for our shareholders.”
Kroger, the largest pure-play supermarket in the U.S., said it expects to continue to generate strong free cash flow and it remains committed to investing in the business to drive long-term sustainable net earnings growth, as well as maintaining its current investment grade debt rating. The retailer also expects to continue to pay its quarterly dividend and expects this to increase over time, subject to board approval. Kroger has paused its share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons, which was the biggest news announcement in the grocery industry in 2022.
CFO Gary Millerchip noted: “Kroger’s 2022 results demonstrate the strength of our value creation model. In 2023, we expect to build on this momentum and deliver revenue and EPS growth on top of the record results achieved over the past three years.
“We expect to grow revenue by continuing to invest in our customers through competitive pricing and personalization, fresh products and a better shopping experience. Building on our significant investments over the past four years, we will also continue to increase associate wages. We will fund these investments through product mix improvements, cost saving initiatives and growth in our alternative profit businesses.
“Looking forward, we believe Kroger is well positioned to successfully operate in an evolving economic environment and continue to deliver attractive total returns for our shareholders.”
