On Tuesday, Sept. 12, supermarket operator Kroger (NYSE:KR) released Q2 2006 earnings for the period ended Aug. 12, 2006.
- Kroger is a firmly established player in an industry so mature it walks with a cane. Sales growth of 9.2% is very impressive under those circumstances, outpacing the overall economy's 4.2% growth rate plus 4.1% inflation.
- The company's low-cost strategy leads to lower gross margins, but the impact where it really matters -- on the bottom line -- appears to be minuscule.
- Free cash flow of five times net earnings gives Kroger freedom to pay well-funded dividends and expand.
(Figures in millions, except per-share data)
Income Statement Highlights
|
Avg. Est. |
Q2 2006 |
Q2 2005 |
Change | |
|---|---|---|---|---|
|
Sales |
$14,640 |
$15,139 |
$13,865 |
9.2% |
|
Net Profit |
-- |
$209 |
$196 |
6.6% |
|
EPS |
$0.29 |
$0.29 |
$0.27 |
7.4% |
|
Diluted Shares |
725 |
730 |
(0.7%) |
Get back to basics with a look at the income statement.
Margin Checkup
|
Q2 2006 |
Q2 2005 |
Change* | |
|---|---|---|---|
|
Gross Margin |
23.39% |
24.53% |
(1.14) |
|
Operating Margin |
2.96% |
3.13% |
(0.17) |
|
Net Margin |
1.38% |
1.41% |
(0.03) |
Margins are the earnings engine. See how they work.
Balance Sheet Highlights
|
Assets |
Q2 2006 |
Q2 2005 |
Change |
|---|---|---|---|
|
Cash + ST Invest. |
$803 |
$379 |
111.9% |
|
Accounts Rec. |
$709 |
$641 |
10.7% |
|
Inventory |
$4,428 |
$4,250 |
4.2% |
|
Liabilities |
Q2 2006 |
Q2 2005 |
Change |
|---|---|---|---|
|
Accounts Payable |
$3,629 |
$3,421 |
6.1% |
|
Long-Term Debt |
$6,131 |
$6,879 |
(10.9%) |
Learn the ways of the balance sheet.
Cash Flow Highlights
|
YTD 2006 |
YTD 2005 |
Change | |
|---|---|---|---|
|
Cash From Ops. |
$1,846 |
$1,792 |
3% |
|
Capital Expenditures |
$763 |
$672 |
13.6% |
|
Free Cash Flow |
$1,083 |
$1,120 |
(3.3%) |
Find out why Fools always follow the money.
Related Companies:
- Safeway (NYSE:SWY)
- SUPERVALU (NYSE:SVU)
- Wal-Mart (NYSE:WMT)
- Target (NYSE:TGT)
- Whole Foods Market (NASDAQ:WFMI)
- Pantry (NASDAQ:PTRY)
Related Foolishness:
Whole Foods is a Motley Fool Stock Advisor selection and Wal-Mart is an Inside Value pick. Sign up for a free 30-day trial to one of our newsletters to find more outstanding businesses.
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At the time of publication, Fool contributor Anders Bylund had no position in any stock mentioned. Fool rules are here .
