Kroger Co. (ticker: KR), one of the largest grocery retailers in the United States, recently released its first-quarter financial report for the year 2023. The company announced significant achievements for the quarter, including a 47% increase in net earnings per diluted common share compared to the same period in the previous year. The adjusted net earnings also grew by 4%, showcasing the company’s consistent growth and strong performance in a competitive market.
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Financial Highlights for Q1 2023
In Q1 2023, Kroger Co. achieved an operating profit of $1.5 billion, which is consistent with the same quarter in 2022. The adjusted FIFO (first-in, first-out) operating profit reached $1.7 billion, marking a 4% increase compared to Q1 of the previous year. Additionally, Kroger generated cash from operations of $2.9 billion – a staggering 160% increase compared to Q1 2022.
The company’s cash and temporary cash investments rose by $1.6 billion, reaching $2.6 billion as of May 20, 2023. During the quarter, Kroger also returned $188 million to shareholders through dividend payments.
Strong Sales Growth and Focus on Digital Solutions
Kroger experienced a 3.5% increase in identical sales, excluding fuel, with total sales growth in their “Our Brands” categories enjoying a 4.9% increase. Digital sales shot up by 15%, driven by an 11% rise in Pickup solutions and a 30% growth in Delivery solutions. The company also revealed that its identical sales would have grown by 5% in the quarter if not for the termination of its agreement with Express Scripts at the end of December 2022.
Inflation Moderates and LIFO Charge
In the volatile inflationary environment, Kroger saw its year-over-year inflation levels moderate, especially in fresh categories. Its LIFO charge for Q1 2023 was $99 million, compared to $93 million in the previous year’s first quarter.
Notable Developments and Legal Settlement
Notably, during Q1 2023, Kroger opened an additional Kroger Delivery customer fulfillment center in Frederick, Maryland, powered by Ocado’s automated smart platform. The company also recognized legal settlement costs of $62 million, the net present value of the $68 million settlement of all pending and future opioid litigation claims with the State of West Virginia. This settlement is not an admission of wrongdoing or liability and does not represent a reliable proxy for the outcomes of any other cases or Kroger’s overall exposure.
Conclusion
Even amidst the many challenges facing businesses today, Kroger Co. has managed to maintain a strong financial performance, showcasing the company’s resilience and strategic positioning in the market. With continued investment in its digital delivery and fulfillment options, Kroger remains well-positioned to provide value for its customers and shareholders alike in the coming years.
Income Statement
Financials in millions USD. Fiscal year is February – January. source
| Year | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 – 1992 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 0 | Revenue | 148258 | 137888 | 132498 | 122286 | 121852 | 123280 | 115337 | 109830 | 108465 | 98375 | Upgrade |
| 1 | Revenue Growth (YoY) | 7.52% | 4.07% | 8.35% | 0.36% | -1.16% | 6.89% | 5.01% | 1.26% | 10.26% | 1.82% | Upgrade |
| 2 | Cost of Revenue | 116480 | 107539 | 101597 | 95294 | 95103 | 95811 | 89502 | 85496 | 85512 | 78138 | Upgrade |
| 3 | Gross Profit | 31778 | 30349 | 30901 | 26992 | 26749 | 27469 | 25835 | 24334 | 22953 | 20237 | Upgrade |
| 4 | Selling, General & Admin | 23848 | 23203 | 24500 | 21208 | 20786 | 21510 | 19162 | 17946 | 17161 | 15196 | Upgrade |
| 5 | Other Operating Expenses | 3804 | 3669 | 3621 | 3533 | 3349 | 3347 | 3221 | 2812 | 2655 | 2316 | Upgrade |
| 6 | Operating Expenses | 27652 | 26872 | 28121 | 24741 | 24135 | 24857 | 22383 | 20758 | 19816 | 17512 | Upgrade |
| 7 | Operating Income | 4126 | 3477 | 2780 | 2251 | 2614 | 2612 | 3452 | 3576 | 3137 | 2725 | Upgrade |
| 8 | Interest Expense / Income | 535 | 571 | 544 | 603 | 620 | 601 | 522 | 482 | 488 | 443 | Upgrade |
| 9 | Other Expense / Income | 694 | 866 | -1131 | -480 | -2016 | 509 | -2 | 10 | 19 | 12 | Upgrade |
| 10 | Pretax Income | 2897 | 2040 | 3367 | 2128 | 4010 | 1502 | 2932 | 3084 | 2630 | 2270 | Upgrade |
| 11 | Income Tax | 653 | 385 | 782 | 469 | 900 | -405 | 957 | 1045 | 902 | 751 | Upgrade |
| 12 | Net Income | 2244 | 1655 | 2585 | 1659 | 3110 | 1907 | 1975 | 2039 | 1728 | 1519 | Upgrade |
| 13 | Net Income Growth | 35.59% | -35.98% | 55.82% | -46.66% | 63.08% | -3.44% | -3.14% | 18.00% | 13.76% | 1.47% | Upgrade |
| 14 | Shares Outstanding (Basic) | 718 | 744 | 773 | 799 | 810 | 895 | 942 | 966 | 981 | 1028 | Upgrade |
| 15 | Shares Outstanding (Diluted) | 727 | 754 | 781 | 805 | 818 | 904 | 958 | 980 | 993 | 1040 | Upgrade |
| 16 | Shares Change | -3.58% | -3.46% | -2.98% | -1.59% | -9.51% | -5.64% | -2.24% | -1.31% | -4.52% | -3.17% | Upgrade |
| 17 | EPS (Basic) | 3.10 | 2.20 | 3.31 | 2.05 | 3.80 | 2.11 | 2.08 | 2.09 | 1.74 | 1.47 | Upgrade |
| 18 | EPS (Diluted) | 3.06 | 2.17 | 3.27 | 2.04 | 3.76 | 2.09 | 2.05 | 2.06 | 1.72 | 1.45 | Upgrade |
| 19 | EPS Growth | 41.01% | -33.64% | 60.29% | -45.74% | 79.90% | 1.95% | -0.49% | 19.77% | 18.62% | 4.69% | Upgrade |
| 20 | Free Cash Flow Per Share | 2.09 | 5.01 | 5.32 | 2.26 | 1.58 | 0.83 | 0.75 | 1.67 | 1.45 | 1.23 | Upgrade |
| 21 | Dividend Per Share | 0.940 | 0.780 | 0.680 | 0.600 | 0.985 | 0.490 | 0.450 | 0.500 | 0.340 | 0.307 | Upgrade |
| 22 | Dividend Growth | 20.51% | 14.71% | 13.33% | -39.09% | 101.02% | 8.89% | -10.00% | 47.06% | 10.75% | 24.29% | Upgrade |
| 23 | Gross Margin | 21.43% | 22.01% | 23.32% | 22.07% | 21.95% | 22.28% | 22.40% | 22.16% | 21.16% | 20.57% | Upgrade |
| 24 | Operating Margin | 2.78% | 2.52% | 2.10% | 1.84% | 2.15% | 2.12% | 2.99% | 3.26% | 2.89% | 2.77% | Upgrade |
| 25 | Profit Margin | 1.51% | 1.20% | 1.95% | 1.36% | 2.55% | 1.55% | 1.71% | 1.86% | 1.59% | 1.54% | Upgrade |
| 26 | Free Cash Flow Margin | 1.01% | 2.70% | 3.11% | 1.48% | 1.05% | 0.60% | 0.61% | 1.47% | 1.31% | 1.29% | Upgrade |
| 27 | Effective Tax Rate | 22.54% | 18.87% | 23.23% | 22.04% | 22.44% | -26.96% | 32.64% | 33.88% | 34.30% | 33.08% | Upgrade |
| 28 | EBITDA | 7011 | 6040 | 7284 | 6020 | 7095 | 4539 | 5794 | 5655 | 5066 | 4416 | Upgrade |
| 29 | EBITDA Margin | 4.73% | 4.38% | 5.50% | 4.92% | 5.82% | 3.68% | 5.02% | 5.15% | 4.67% | 4.49% | Upgrade |
| 30 | Depreciation & Amortization | 3579 | 3429 | 3373 | 3289 | 2465 | 2436 | 2340 | 2089 | 1948 | 1703 | Upgrade |
| 31 | EBIT | 3432 | 2611 | 3911 | 2731 | 4630 | 2103 | 3454 | 3566 | 3118 | 2713 | Upgrade |
| 32 | EBIT Margin | 2.31% | 1.89% | 2.95% | 2.23% | 3.80% | 1.71% | 2.99% | 3.25% | 2.87% | 2.76% | Upgrade |
Note that we may hold securities mentioned in this article. All data is based on recent SEC filings. Even though we have implemented various manual and automatic fact-checking and data acquisition processes, some incorrect information may have slipped through (false positive). Let us know if you find any inconsistencies!