Kroger’s streak of market-share growth ends
CINCINNATI — Kroger reported a $2 billion profit for 2016 — a 3.1 percent increase from the previous year.
Total sales rose 5 percent to $115.3 billion, reflecting the acquisition of Milwaukee-based Roundy’s in December 2015.
Identical-store sales excluding fuel rose 1 percent during the fiscal year ended Jan. 28, but actually declined 0.7 percent in the fourth quarter — snapping a 13-year winning streak of market share growth. Kroger’s razor-thin 0.1 percent gain in its third quarter was its 52nd consecutive quarter of identical store sales increases.
Kroger considers identical-store sales without fuel a critical performance measure because it strips out increases in sales from newly built or expanded stores. Supermarkets that fall into the “identical” category have been open without major changes for at least five full quarters.
The Cincinnati-based supermarket chain battled food price deflation through 2016, which depressed sales.
Kroger’s 53 cents of earnings per diluted share during the fourth quarter matched Wall Street expectations, while sales exceeded forecasts. Analysts expected Kroger to report a $505 million profit before one-time items on sales of $27.4 billion, according to Zacks.
CEO Rodney McMullen said Kroger would cut costs make the grocer more competitive. The company said it is wrapping up a voluntary retirement offer to 2,000 non-store workers previously announced in December, adding 1,300 are ultimately expected to accept it.
“Some times are just more challenging than others, and last year certainly did not end the way we expected at the start,” McMullen told analysts on a Thursday conference call.
Kroger said it would spend less money in 2017 on building new stores and renovating existing ones.
Costco
Costco Wholesale Corp. announced Thursday that it’s raising its membership fees, as the warehouse club operator released quarterly results that fell short of Wall Street’s expectations. Its shares fell more than 4 percent in after-hours trading.
Starting June 1, annual membership fees for individual, business and business add-on members in the U.S. and Canada will rise $5 to $60. Executive memberships in the U.S. and Canada will increase from $110 to $120. Overall, the fee increases will affect around 35 million members.
The Issaquah, Washington-based company reported fiscal second-quarter net income of $515 million, or $1.17 per share. The average estimate of 13 analysts surveyed by Zacks Investment Research had been for earnings of $1.35 per share.
Barnes & Noble
Barnes & Noble investors were bracing for weak results over the holidays. What they got was worse.
The bookstore chain posted profit of 96 cents last quarter, well below the $1.13 analysts estimated. And same-store sales — a closely watched benchmark — plunged 8.3 percent. That was the biggest holidayquarter decline since 2005.
The stock fell as much as 9.1 percent to $9 in New York trading, the biggest intraday drop since August 2016. That followed an 11 percent decline this year through Wednesday’s close.
The results suggest that Chief Executive Officer Leonard Riggio has more of an uphill battle against Amazon.com Inc. than feared. Barnes & Noble is struggling to get customers into its stores, and efforts to expand its nonbook merchandise has had limited payoff.