Kroger share price down 12% on Q4 results revenue miss

Kroger stock is down after a lackluster Q4 earnings report.

US dollar after Kroger Q4 results Source: Bloomberg

Kroger’s share price may fall after a disappointing Q4 earnings report. Kroger’s Q4 results dropped below Wall Street expectations for the grocery store chain.

Kroger results: key figures

Earnings per share (EPS) $0.48
Revenue $28.1 billion
Net Income $259 million
Total Sales $121.2 billion

Kroger share price is down 12% as Q4 results revenue misses estimates

Kroger’s earnings per share (EPS) was $0.48, dipping below financial experts’ EPS expectations of $0.52. Kroger’s revenue was $28.1 billion, missing projected estimates of $28.38 billion. Net income significantly plummeted to $259 million from $854 million in 2017. Total in-store sales also decreased 9% to $28.1 billion.

Kroger lost revenue by upgrading its stores and investing in e-commerce to compete with Amazon. Despite the $3.2 billion debt incurred and decline in brick-and-mortar store sales, Kroger’s Q4 results had a positive result with online sales. Digital sales of groceries increased by 58% in 2018.

Schlotman also touted the success of the chain’s online grocery delivery system.

‘Eleven million people a day come through our stores on average, they live within two miles of one of our stores. We do as good a job than anybody else of getting products close to their house,’ said Schlotman.

Kroger’s outgoing chief executive officer, (CEO), Michael Schlotman, noted the chain’s enthusiasm for its e-commerce division.

‘We’re very bullish on our digital business’, said Schlotman.

What do Kroger’s Q4 results mean for their share price?

Kroger’s Q4 results could mean a steep drop in its share price. Kroger’s stock has plummeted 12% after the lackluster earnings report and could fall further.

How do Kroger’s Q4 results compare to other retailers?

Kroger’s Q4 results are disappointing compared to Walmart. Walmart’s Q4 report was positive, with increased in-store and online purchases.

What is Kroger’s dividend yield?

Kroger’s dividend increased by 12% for the 12th straight year. The retailer projects Q1 EPS between $2.15-$2.25. Those figures are below expectations of Wall Street’s $2.26 EPS estimate. The chain also predicted that sales growth would be between 2-2.25% in fiscal year 2019.

Incoming CEO, Rodney McMullen, noted that the investment in Kroger stores and online sales is part of the company’s goal to increase sales through 2020.

‘Kroger solidly delivered on what we set out to do in 2018, which was an investment year that laid the groundwork for us to achieve our 2020[online business] Restock Kroger targets,’ said McMullen.

Kroger struggles in age of online groceries

Kroger spent billions of dollars to catch up to Walmart and Amazon in online grocery shopping, but the results didn’t pay off in Kroger’s Q4 results. It remains to be seen if that will change for Kroger in Q1 2019.


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