- Kroger reported its fourth-quarter and full-year 2020 earnings Thursday morning.
- The supermarket chain beat fourth-quarter earnings estimates, but forecast slower sales in 2021.
- In 2020, Kroger’s digital sales more than doubled.
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Kroger on Thursday signaled a bigger-than-expected slowdown in sales of groceries this year as a pandemic-fueled demand that helped it top expectations for fourth-quarter results tempers.
The company, however, forecast full-year earnings above estimates, as it undertakes cost-saving initiatives in its sourcing, equipment purchases and supply chain, sending shares up about 1% in premarket trade.
Kroger’s sales surged last year as stuck-at-home consumers rushed in droves to the websites and apps of big national grocery chains to stock up on food and household essentials.
Kroger’s full-year 2020 sales were $132.5 billion, compared to $122.3 billion in 2019. The supermarket chain reported a $2.8 billion operating profit for 2020, up from $2.3 billion the previous year. In 2020, Kroger’s digital sales more than doubled, growing by 116%.
Analysts expect that sales growth would be difficult to replicate this year as the rollout of COVID-19 vaccines promises a return to relative normalcy, removing the need to hoard supplies.
Kroger expects adjusted full-year same-store sales to fall 3% to 5%, more than analysts’ estimates of a 2.5% decline.
The supermarket chain forecast full-year profit per share between $2.75 and $2.95, above analysts’ estimates of $2.69.
Same-store sales, excluding fuel, rose 10.6% in the fourth quarter, beating the Refinitiv IBES estimate of a 9.4% rise.
Kroger reported a net attributable loss of $77 million in the fourth quarter compared to a profit of $327 million a year earlier, as it recorded a previously announced near $1 billion charge related to its withdrawal from a union pension fund.
Excluding one-time items, Kroger earned 81 cents per share, beating estimates of 69 cents per share.