Several strategic plans are driving growth for Kroger, according to its recent third quarter 2021 results. The company has experienced growth across its fresh and prepared foods segments, as well as in the digital retail space, all while raising its full-year 2021 guidance.
"Kroger's strategy to lead with fresh and accelerate with digital continues to connect with our customers,” said Chairman and Chief Executive Officer Rodney McMullen. “Our agility and the commitment from our amazing associates is allowing us to navigate current labor and supply chain conditions and provide the freshest food at affordable prices across our store and digital ecosystem. Our focus on execution, combined with our continued discipline in balancing investments in our associates and customers with exceptional cost management, and growth in our alternative profit business allowed us to exceed internal expectations and deliver strong sales and earnings growth.”
Total company sales came in at $31.9 billion for the third quarter, compared to $29.7 billion for the same period last year, which is a sales increase of 2.9 percent. Kroger's net total debt to adjusted EBITDA ratio, according to a press release, is 1.68, compared to 1.74 a year ago. The company's net total debt to adjusted EBITDA ratio target range is reportedly 2.30 to 2.50.
"Across all aspects of our business, we are innovating and executing with speed against the key initiatives that are transforming our business," McMullen continued. "Kroger is in a position of strength. We are committed to delivering for our associates, customers, and communities, and we remain confident in our ability to deliver total shareholder returns of 8 percent to 11 percent over time."
In terms of its fresh and prepared foods strategies, Kroger surpassed $1 billion in annualized sales for Home Chef, launched 216 new items under Our Brands, expanded its End-to-End Fresh program, and partnered with Kipster Farms to bring carbon-neutral, cage-free eggs to retail shelves. On the digital front, Kroger launched Kroger Delivery Now, announced plans for five new fulfillment centers, and revealed a new advertising marketplace.
Other noteworthy benchmarks include:
On top of this growth, Kroger has also raised its full year 2021 guidance.
"Driven by the momentum in our third quarter results and sustained food at home trends, we are raising our full-year guidance,” said Chief Financial Officer Gary Millerchip. “We now expect our two-year identical sales stack to be in the range of 13.7 percent to 13.9 percent. We expect our adjusted net earnings per diluted share to be in the range of $3.40 to $3.50. Kroger is executing against its key financial and operational initiatives and continues to invest in strategic priorities that will drive attractive and sustainable total shareholder returns. We believe our business is emerging stronger through the pandemic and is well-positioned to grow beyond 2021."
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