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KROGER ANNOUNCES SECOND QUARTER, FIRST HALF RESULTS

 KROGER ANNOUNCES SECOND QUARTER, FIRST HALF RESULTS
 CINCINNATI, July 14 /PRNewswire/ -- The Kroger Co. (NYSE: KR) said


today that operating cash flow in the 1992 second quarter declined 21.7 percent, reflecting primarily the impact of a prolonged strike in the company's Michigan division, as well as aggressive competition and low food price inflation.
 Kroger said results in many of its key markets were ahead of the prior year's second quarter. In addition, the company noted that identical food store sales during the initial four weeks of the third quarter, excluding Michigan, are up slightly over the same period in 1991. Kroger said that a vigorous marketing effort in the Michigan division since the strike ended has restored sales to pre-strike levels.
 In the 1992 second quarter, operating cash flow (earnings before interest, taxes, depreciation and LIFO) declined to $184.5 million, compared to $235.6 million in the 1991 second quarter. Earnings from operations before extraordinary charges were $4.5 million, or 5 cents per share, versus $32.2 million, or 36 cents per share, in the year-ago quarter. After the extraordinary charge, related to the loss from the early retirement of debt, Kroger had a second quarter net loss of $29.4 million, or a loss of 32 cents per share.
 Total sales in the second quarter were $5.072 billion, down 0.3 per cent from $5.086 billion a year ago. Identical food store sales in the quarter --- excluding Michigan --- were flat, reflecting the impact of low inflation in grocery costs and actual deflation in perishables.
 Net interest expense declined 11.1 percent in the second quarter to $110 million as the company redeemed or replaced $400.9 million of higher cost securities with new, lower coupon debt.
 Joseph A. Pichler, chairman and chief executive officer, said the 67-day Michigan work stoppage caused substantially all of the decline in the company's cash flow during the second quarter. He added that the new, five-year contract in Michigan, plus new contracts signed during the quarter in such key markets as Nashville, Phoenix and South Bend, "give us reasonable cost structures plus increased operating flexibility --- both of which are necessary for Kroger to be a successful, long-term competitor."
 Kroger's second quarter performance underscores the challenging operating environment confronting all food retailers, Pichler said. "Clearly, the slow pace of economic recovery has not yet restored the confidence of consumers who continue to watch household spending for consumable items," he said. "While disappointed with overall results, we believe the investment we are making in operating efficiencies and sales promotions in key markets maintains our strong market share and enables us to compete successfully against aggressive merchandising programs of both traditional and new retail competitors."
 Pichler indicated that the outlook for the balance of 1992 remains uncertain because of the continued low level of food inflation and the slow pace of the economic recovery. "Kroger's geographic spread and the proven appeal of our combination stores are helping sustain our business through this challenging period," he said.
 For the first six months of 1992, total company sales were $10.11 billion, up 1.2 percent, while operating cash flow was $396.8 million, down 11.5 percent. Earnings before the extraordinary charge were $25.5 million, or 28 cents per share. After the extraordinary charge for early debt retirement, Kroger's first half net loss was $38.7 million, or a loss of 43 cents per share.
 The Kroger Co.
 Sales and Earnings
 2nd Qtr 2nd Qtr Percent
 1992 1991 Change
 6/13/92 6/15/91
 Sales $5,072,229,761 $5,086,386,697 (0.3)
 EBITD (1) $ 184,483,618 $ 235,608,744 (21.7)
 LIFO $ (2,800,000) $ (4,500,000)
 Interest $ (110,036,738) $ (123,719,424)
 Depreciation
 $ (59,123,356) $ (56,976,398)
 Earnings before
 tax expense and
 extraordinary
 loss $ 12,523,524 $ 50,412,922
 Tax expense
 $ (7,996,723) $ (18,180,898)
 Earnings before
 extraordinary
 loss $ 4,526,801 $ 32,232,024
 Extraordinary
 loss (2) $ (33,895,136) $ (1,632,863)
 Net earnings
 (loss) $ (29,368,335) $ 30,599,161
 Earnings (loss)
 per common
 share (3):
 From operations
 $ 0.05 $ 0.36
 From extraordinary
 loss(2)$ (0.37) $ (0.02)
 Net earnings (loss)
 per common
 share $ (0.32) $ 0.34
 Average number of
 common shares
 used in per share
 calculation
 91,202,059 90,706,779
 2 Qtrs 2 Qtrs Percent
 1992 1991 Change
 6/13/92 6/15/91
 Sales $10,110,723,001 $9,993,517,946 1.2
 EBITD (1) $ 396,755,816 $ 448,327,997 (11.5)
 LIFO $ (9,400,000) $ (16,000,000)
 Interest $ (222,923,643) $ (248,926,445)
 Depreciation
 $ (116,710,994) $ (112,299,981)
 Earnings before
 tax expense and
 extraordinary
 loss $ 47,721,179 $ 71,101,571
 Tax expense
 $ (22,217,319) $ (28,087,409)
 Earnings before
 extraordinary
 loss $ 25,503,860 $ 43,014,162
 Extraordinary
 loss (2) $ (64,165,010) $ (7,058,611)
 Net earnings
 (loss) $ (38,661,150) $ 35,955,551
 Earnings (loss)
 per common
 share (3):
 From operations
 $ 0.28 $ 0.48
 From extraordinary
 loss (2) $ (0.71) $ (0.08)
 Net earnings (loss)
 per common
 share $ (0.43) $ 0.40
 Average number of
 common shares
 used in per share
 calculation
 90,951,414 90,073,016
 (1) EBITD represents pre-tax earnings before interest, depreciation and LIFO.
 (2) Represents the after-tax loss from the early retirement of debt.
 (3) Earnings (loss) per common share equals net earnings (loss) divided by the weighted number of common shares outstanding after giving effect to dilutive stock options. Fully diluted earnings per share are not presented since they approximate the reported per share figures.
 -0- 7/14/92
 /CONTACT: Paul Bernish (media), 513-762-1304; or Pam Taylor (investor), 513-762-4969; both of The Kroger Company/
 (KR) CO: The Kroger Company ST: Ohio IN: REA SU: ERN


KK -- CL013 -- 9021 07/14/92 10:31 EDT
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Date:Jul 14, 1992
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