Kroger Reports Fourth Quarter Gains
Fourth quarter sales at Kroger were down year-over-year as company officials pinned the decrease on a calendar shift and the sale of Kroger Specialty Pharmacy.
For the quarter ended February 1, total sales were $34.3 billion, down from sales of $37.1 billion in the comparable quarter the previous year. The fourth quarter of 2023 included revenue of $2.7 billion from the 53rd week in 2023 and $737 million from Kroger Specialty Pharmacy Sales.
Excluding fuel, Kroger Specialty Pharmacy, and the 53rd week in 2023, sales increased 2.6% compared to the same period last year, and identical sales without fuel increased 2.4%.
Gross margin was 22.7% of sales for the fourth quarter compared to 22.3% for the same period last year. The improvement in gross margin was primarily attributable to the sale of Kroger Specialty Pharmacy and lower shrink, partially offset by lower pharmacy margins and the LIFO charge.
“Kroger is operating from a position of strength, delivering fourth quarter results that came in ahead of expectations due to the strength of our model and the disciplined execution of our teams,” said Ron Sargent, chairman and interim CEO of Kroger. “We enter 2025 with positive momentum, focused on delivering an incredible customer experience through great quality at low prices."
Sargent took the top spot at Kroger on March 3 following the resignation of former Chairman and CEO Rodney McMullen following an investigation into his “personal conduct” by the company’s board of directors.
Kroger issued a statement that did not offer details of the investigation, but noted the conduct in question, while unrelated to the business, was inconsistent with the company’s Policy on Business Ethics.
For the full year, total company sales were $147.1 billion in 2024, which includes $2 billion of Kroger Specialty Pharmacy sales, compared to $150 billion for the same period last year, which included $2.7 billion from the 53rd week in 2023 and $3.2 billion of Kroger Specialty Pharmacy sales. Excluding fuel, Kroger Specialty Pharmacy, and the 53rd week in 2023, full-year sales increased 1.8% compared to the previous year.
Gross margin was 22.3% of sales for 2024 compared to 21.8% for the same period last year. The improvement in gross margin was primarily attributable to the sale of Kroger Specialty Pharmacy, Our Brands performance, and lower shrink, partially offset by lower pharmacy margins.
For the year ahead, Kroger is forecasting identical sales growth without fuel of between 2% and 3% with adjusted net earnings per share of $4.60 and $4.80. Capital expenditures are expected to be between $3.6 billion and $3.8 billion.
