Kroger said second-quarter identical sales without fuel rose 0.2%, a sharp slowdown from 3.4% a year earlier, even as total sales climbed to $34.6 billion from $33.9 billion.
Operating profit increased to $971 million from $863 million, while earnings per share rose to $1.05 from $0.91. Adjusted EPS came in at $1.09, up from $1.04, and adjusted FIFO operating profit was $1.076 billion, compared with $1.091 billion a year ago.
Gross margin edged down to 22.4% from 22.5%, but the FIFO gross margin rate increased 13 basis points. The company said its OG&A rate increased 33 basis points from last year.
Kroger said adjusted ecommerce sales grew 20%, and Kroger Precision Marketing profit increased 24%.
On the balance sheet, net total debt to adjusted EBITDA rose to 1.91 from 1.63 a year ago.
The company repurchased $1.0 billion of shares in the quarter and $1.2 billion year to date under its $2 billion authorization. About $800 million remains under that plan.
Kroger narrowed its full-year identical sales without fuel guidance to 0.2% to 0.8%, down from 1.0% to 2.0% previously. It left full-year adjusted FIFO operating profit at $5.0 billion to $5.2 billion, EPS at $5.10 to $5.30, free cash flow at $2.7 billion to $2.9 billion, and capital expenditures at $3.8 billion to $4.0 billion. As a result of these announcements, the company's shares have moved 4.15% on the market, and are now trading at a price of $59.315. For more information, read the company's full 8-K submission here.
