Kroger's Quarterly Earnings Drop Almost $50 Million
CINCINNATI -- The Kroger Co., one of the nation's largest operators of supermarkets and also of 799 convenience stores under names including Kwik Shops, Quick Stop and Loaf 'N' Jug, reported that its second-quarter earnings fell almost $50 million from a year ago, hurt by debt charges and the Southern California strike, reported the Associated Press.
The company's earnings per share of 19 cents for the quarter ended Aug. 14 fell short of the 27 cents projected by industry analysts surveyed by Thomson First Call. Wall Street reacted quickly, pushing Kroger's shares down more than 5 percent, or 93 cents, to $15.77 in afternoon trading on the New York Stock Exchange.
Net earnings for the quarter were $142.4 million. They were reduced by $15.3 million, or 2 cents per share, because Kroger chose to pay its debt early for $750 million in financial notes due to be redeemed next March. That will reduce the company's interest expense by 2 cents per share this fiscal year.
Kroger earned $190.4 million, or 25 cents per share, a year ago. Those earnings were reduced by $42 million, or 6 cents per share, for one-time expenses. Sales for the latest quarter increased 5 percent to $13 billion, compared with last year's $12.3 billion.
Kroger said it is still feeling the effects of a four-and-a-half-month-long strike at Southern California grocery stores that ended in late February. Kroger's earnings for the latest quarter were $23.4 million, or 3 cents per share, less than what company officials expected had the California strike not occurred.
The strike against Kroger and two other retail grocers, Safeway Co. and Albertsons Inc., cost the chains more than $1.5 billion in sales and affected about 70,000 workers at more than 850 stores.
David Dillon, Kroger's chairman and CEO, told analysts he was pleased with Kroger's quarterly sales increase, but that the outlook for the second half of this fiscal year will hinge on how Kroger does in the face of competition across its markets from Wal-Mart stores and other discounters.
The company's earnings per share of 19 cents for the quarter ended Aug. 14 fell short of the 27 cents projected by industry analysts surveyed by Thomson First Call. Wall Street reacted quickly, pushing Kroger's shares down more than 5 percent, or 93 cents, to $15.77 in afternoon trading on the New York Stock Exchange.
Net earnings for the quarter were $142.4 million. They were reduced by $15.3 million, or 2 cents per share, because Kroger chose to pay its debt early for $750 million in financial notes due to be redeemed next March. That will reduce the company's interest expense by 2 cents per share this fiscal year.
Kroger earned $190.4 million, or 25 cents per share, a year ago. Those earnings were reduced by $42 million, or 6 cents per share, for one-time expenses. Sales for the latest quarter increased 5 percent to $13 billion, compared with last year's $12.3 billion.
Kroger said it is still feeling the effects of a four-and-a-half-month-long strike at Southern California grocery stores that ended in late February. Kroger's earnings for the latest quarter were $23.4 million, or 3 cents per share, less than what company officials expected had the California strike not occurred.
The strike against Kroger and two other retail grocers, Safeway Co. and Albertsons Inc., cost the chains more than $1.5 billion in sales and affected about 70,000 workers at more than 850 stores.
David Dillon, Kroger's chairman and CEO, told analysts he was pleased with Kroger's quarterly sales increase, but that the outlook for the second half of this fiscal year will hinge on how Kroger does in the face of competition across its markets from Wal-Mart stores and other discounters.