KR 2009 Q4 Earnings - by BetterTrades

In a statement released early Tuesday morning, the nation’s largest grocery chain store, Kroger Co. (KR) revealed their results for the 4Q in which profits grew year-over-year as price-conscious buyers purchased more store brands, boosting sales.

For the recent quarter, Kroger posted a net profit of $349.2M, or $0.53 per share, in contrast to last year’s earnings of $322.9M, or $0.48 per share, an increase in net income of more than 8% year-over-year.

Overall sales for the period advanced marginally, climbing from $17.2B a year ago, to the current reading of $17.3B, an increase of less than one percent. On average, analysts within the industry were looking for the grocer to post earnings of $0.52 per share on total revenues of $18.33B.

A key indicator of the retail environment, same store sales, jumped 3.8% during the quarter for Kroger’s supermarket sales. Additionally, the company’s supermarket fuel centers and convenience stores saw year-over-year sales increase 4.4%.

Kroger also posted a record 35% of all grocery sales came from the company’s store brand. In addition, the company saw 27% of all grocery revenues coming from the Kroger brands. With increases in sales of store brands, Kroger was able to increase their gross margins, which came in at 24.41% of sales, up 85 basis points over last year’s 4Q.

"These market share gains are impressive, and there is still plenty of market share opportunity out there for us," Dillon added. "We estimate that approximately 45 percent of the share in our major markets as much as $100B is still held by competitors who do not have Kroger's economies of scale."

The company has been tracking their market share against their rivals and statistics have shown, internally, that Kroger has increased their share in a majority of the markets.

For the year, Kroger posted a 6% increase in annual profits, increasing from $1.18B, or $1.69 per share, to $1.25B, or $1.90 per share. Taking into account the disruption and damage cause by last season’s hurricanes, Kroger’s net earnings were affected negatively by $0.02. Yearly sales for the company jumped from $70.2B to $75.9B, an increase in year-over-year revenues of more than 8%.

Looking ahead to the company’s fiscal 2009, Kroger is looking to post annual earnings between $2.00 and $2.05 per share, while analysts are anticipating $2.08 per share for the company’s yearly earnings. Although the company is looking to post 2009 earnings below market expectations, Kroger still believes that same store sales will increase between 3% and 4% for the year.

Kroger shares, which have been trading in a range between $19.39 and $30.99 per share over the past year, concluded Tuesday’s session up more than 10%, adding $1.98, to close at $21.44 per share.

By BetterTrades