Kroger beats Q4 expectations, but 2025 guidance disappoints
By Josh White
Date: Thursday 06 Mar 2025
(Sharecast News) - Kroger reported fourth-quarter earnings that exceeded Wall Street expectations on Thursday, although America's largest grocer also delivered full-year 2025 guidance that came in slightly below analyst forecasts.
The supermarket giant posted adjusted earnings of $1.14 per share, above the consensus estimate of $1.12, while revenue of $34.31bn fell short of expectations.
Identical sales, excluding fuel, rose 2.4% in the quarter.
For the 2024 financial year, Kroger recorded revenue of $147.12bn, with a net profit of $2.67bn, or $3.67 per share.
Digital sales continued to grow, surpassing $13bn for the year, while the company's media business saw a 17% increase, contributing to $1.35bn in operating profit from alternative profit sources.
Kroger also raised associate wages, bringing its average hourly rate to more than $19, or over $25 when factoring in benefits.
Looking ahead, Kroger said it expected 2025 identical sales growth of 2% to 3%, adjusted operating profit between $4.7bn and $4.9bn, and adjusted earnings of $4.60 to $4.80 per share.
The earnings outlook was slightly below the $4.81 per share analysts had projected.
Capital expenditure was expected to range from $3.6bn to $3.8bn, with an adjusted free cash flow forecast of $2.8bn to $3bn.
Kroger said it was continuing to focus on shareholder returns, having initiated a $5bn accelerated share buyback programme as part of its $7.5bn shareholder authorisation.
The company also reiterated its commitment to maintaining a strong balance sheet and dividend growth over time.
"I am excited to join this talented and experienced management team in my role as interim CEO," said Ron Sargent - new to the role since the company announced the resignation of chief executive Rodney McMullen earlier this week after a 'personal conduct' investigation.
"I am committed to ensuring that we execute with speed and that our teams continue to advance our go-to-market strategy to deliver for our customers, associates, communities, and shareholders."
Sargent said Kroger was operating from a "position of strength", delivering fourth quarter results ahead of expectations due to the strength of its model and the "disciplined execution" of its teams.
"We enter 2025 with positive momentum, focused on delivering an incredible customer experience through great quality at low prices."
Reporting by Josh White for Sharecast.com.
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