Kroger increases sales by 3.9% and exceeds expectations
Kroger’s (KR) top line improved 3.9% YoY (year-over-year) in the second quarter of fiscal 2018 to $27.6 billion. The company outperformed Wall Street expectations by $110 million.
In comparison, Walmart (WMT), Kroger’s closest competitor in most markets, recorded a 2.1% increase in sales to $123 billion when it reported second quarter results on August 17. The retail giant outdid Wall Street expectations by $560 million.
Same-store sales move back to green during the quarter
Kroger’s sales comps returned to the positive territory after declining for two consecutive quarters. Comps (ex-fuel) stood at 0.7% during the second quarter. In comparison, Walmart’s US comps rose 1.8% during the second quarter.
“We returned to positive identical supermarket sales growth in the second quarter. We had strong growth in both loyal and total households. Traffic is up, unit movement is up, market share is up, and our customers’ price perception is excellent and continues to improve. We have and always will put the customer first in all we do,” said Kroger’s chair and CEO, Rodney McMullen.
Digital sales improved 126% during the quarter, driven by ClickList. The company currently has more than 25 million digital customer accounts.
The company’s private brands reported robust growth and outperformed the sales of national brands. Private brands now account for 27.7% of total units sold at Kroger, and 25.4% of total sales (excluding fuel and pharmacy).
CEO Rodney McMullen also noted that Kroger’s Simple Truth range is now the biggest natural and organic brand by volume in the US.
Investors looking for exposure to Kroger through ETFs can choose to invest in the First Trust Consumer Staples AlphaDEX Fund (FXG), which invests 3.2% of its portfolio in the company.