The much-awaited financial numbers out of national grocers Kroger
Kroger said total Q4 sales rose 4.5% to $13 billion. Gross margins fell, even at divisions without labor problems, indicating competitive pressure. In all, the company turned in a net loss of $337 million, reversing last year's net profit of $381 million. In better news, the business generated free cash flow of about $215 million and managed to finish the fiscal year with lower debt levels than it had a year before.
At Albertson's, Q4 sales fell to $8.6 billion from $9.1 billion as same-store sales fell 6.5%. (Excluding the strike, it should be noted that "comps" actually rose 1.2%.) Net income for the quarter finished down $75 million to $130 million. Gross and operating margins fell. The generation of some $450 million in free cash flow and lower debt, however, softened the blow.
Still, the strike had a significant impact on results at both companies. Albertson's pointed to $700 million in lost sales and $90 million in missing net income during the quarter, while Kroger said the strike (as well as a separate West Virginia work stoppage) was responsible for $156 million in missing bottom-line profit. It should be noted that all this is not to mention any effects on collective bargaining partner Safeway
And progress in that business marches on: The timing of Wal-Mart's
In the long term, reports say that Wal-Mart plans 40 Supercenters in California, and that information must have colored the grocery labor talks. (Reread our recent Struggling Supermarkets feature for more.)
Fool contributor Dave Marino-Nachison doesn't own any companies in this story. He can be reached via email.