What happened
Shares of Kroger (KR 0.94%) popped 11.6% to a record closing high of $55.10 on Thursday, following the release of the grocery leader's fourth-quarter results.
So what
Kroger's sales jumped 7.5% year over year to $33 billion. After adjusting for fluctuations in fuel prices, the grocery retailer's sales rose 3.7%. The gains were driven by a 4% increase in identical sales, which adjust for store openings, closings, and fuel-related transactions.
In addition to its focus on providing high-quality, fresh food in stores, Kroger's online channels have become a major part of its growth story during the pandemic. The grocery chain's digital sales were up 105% compared to Q4 2019.
"Our strategy of leading with fresh and accelerating with digital propelled Kroger to record performance in 2021, on top of record results in 2020," CEO Rodney McMullen said in a press release.
Image source: Getty Images.
Better still, Kroger's massive scale has allowed it to navigate supply-chain challenges better than many of its smaller rivals. Its adjusted gross margin increased by 3 basis points, which helped its adjusted operating profit climb to more than $1 billion.
Kroger's adjusted earnings per share grew 12% to $0.91. That was well above Wall Street's estimates, which had called for per-share profits of $0.74.
Now what
Management sees more gains ahead. Kroger's guidance for 2022 included:
- Identical sales growth, excluding fuel, of 2% to 3%.
- Adjusted earnings per share of $3.75 to $3.85, representing growth of roughly 3%.
"Kroger's 2021 results demonstrate the strength of our value creation model, and in 2022 we expect to build on this momentum," chief financial officer Gary Millerchip said.
