As it continues to highlight its digital efforts, Kroger posted sales and earnings that exceeded Wall Street expectations.
Adjusted diluted earnings per share beat a Yahoo Finance-published analyst average estimate of 82 cents while sales topped a $33.95 billion estimate.
Identical sales without the effect of fuel prices increased 6.9% in the quarter year over year, the company reported.
Sales came in at $34.2 billion compared to $31.86 billion in the year-previous period, Kroger maintained. Operating profit was $841 million versus $868 million in the year-previous period.
Among the quarter’s highlights, as identified by Kroger, delivery sales increased by 34% year over year driven by Kroger Boost membership program and customer fulfillment centers.
In a conference call, Kroger chairman and CEO Rodney McMullen said the company has been using its data science capabilities to develop unique customer insights and offer targeted promotions, which is, among other developments, driving engagement with digital coupon downloads, up 32% year over year. Kroger expects customers to realize more than $200 million in savings from personalized digital offers, he said. To follow back-to-back quarters of digital growth, led by its delivery operation, Kroger has introduced app enhancements to make it easier for customers to engage with its savings and promotion. The company introduced its first in-app flash sales and enabled customers to clip digital offers directly from their cart.
As he announced the financial results, McMullen said, “Kroger achieved strong results in the third quarter as we continue to execute our Leading with Fresh and Accelerating with Digital strategy. Our associates are doing an outstanding job delivering a full, fresh and friendly experience across our seamless store and digital ecosystem. Kroger’s value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted Our Brands products and an industry-leading fuel rewards program, is resonating with shoppers and driving increased customer loyalty. This quarter demonstrates the strength of our approach to growing our business. By delivering for our customers, investing in our associates and supporting our communities, we are creating attractive and sustainable total returns for our shareholders.”
