KR - The Kroger Co. (NYSE Stock)

[BadThad]

I'm looking at this stock right now. I know some management and they tell me business is good....in fact, better than ever. First time posting this play here, but I've played many times in the past based on "rumor" and it's always worked out. PPS is about $27.xx today, should be good for at least $1-3 up move at earnings IMO.

KR - The Kroger Co. - Google Finance

Current PPS: $27.09

[BadThad]

Time to reboot KR, a very steady and solid stock. Earnings out and they are good. Just look at KR's PPS for the last year, it's quite amazing really:

Kroger Reports Third Quarter Results
8:50a ET December 9, 2008 (PR NewsWire)
The Kroger Co. (NYSE: KR) today reported total sales of $17.6 billion for the third quarter ended November 8, 2008, an increase of 9.0% over the same period last year. Identical supermarket sales increased 5.6% without fuel and 7.8% with fuel compared with the same quarter last year.

Net earnings in the third quarter totaled $237.7 million, or $0.36 per diluted share. These results include an after-tax charge of $15.9 million, or $0.03 per diluted share, related to Kroger's $25 million insurance deductible for disruption and damage caused by Hurricane Ike. Excluding this charge from Hurricane Ike, third quarter net earnings were $253.6 million, or $0.39 per diluted share (Table 6).

Net earnings in the same period last year were $253.8 million, or $0.37 per diluted share. Those results included a tax benefit that was partially offset by low fuel margins and incremental investments in Kroger's Customer 1st strategy. This benefit increased net earnings by approximately $0.02 to $0.03 per diluted share.

"Kroger's sales continue to be strong in this tough economy. We know our customers are increasingly feeling pressured in today's environment. Kroger's focus on low prices, quality products and providing a convenient, one-stop solution for their daily needs is resonating with our customers," said David B. Dillon, Kroger chairman and chief executive officer. "Our associates continue to build customer loyalty through our Customer 1st strategy, which allows us to create a solid return for our shareholders even as the economy presents new challenges."

FIFO Gross Margin

Including Kroger's retail fuel operations, FIFO gross margin (Table 1) was 23.30% of sales, a decline of 8 basis points compared to the third quarter last year. Excluding retail fuel operations, FIFO gross margin declined 15 basis points and supermarket selling gross margin declined 27 basis points. Kroger continued its strategy of providing savings to customers through strategic price reductions.

LIFO

The Company recorded a $68.8 million LIFO charge during the quarter, an increase of $28.8 million over the prior year. Excluding retail fuel sales, the LIFO charge increased 18 basis points as a rate of sales compared to the prior year. The higher LIFO charge primarily reflects the effect of rising food inflation on the Company's merchandise inventory valuation.

Operating, General & Administrative (OG&A) Costs

Including Kroger's retail fuel operations, OG&A costs were 17.42% of sales, a decline of 7 basis points compared to the third quarter last year. Excluding retail fuel operations, the OG&A rate increased 40 basis points. Of this increase, 17 basis points stem from the $25 million charge related to Hurricane Ike, 13 basis points are related to higher health care costs and 5 basis points were associated with expenses affected by higher oil and energy costs.

Rent and Depreciation

Including Kroger's retail fuel operations, rent and depreciation expense was 2.76% of sales, a decrease of 12 basis points compared to the third quarter last year. Excluding retail fuel operations, rent and depreciation expense declined 4 basis points as a rate of sales.

Financial Strategy

"Kroger's balance sheet is strong. Our company's financial strength has been a competitive advantage for several years, and is even more so in the current environment," Mr. Dillon said. "Kroger's strong financial position gives us the flexibility to continue investments in our successful Customer 1st strategy and store base that will create value for our shareholders in the future while delivering near-term financial results."

Kroger is using its cash flow to leverage its financial strength and support an appropriate level of liquidity under current economic conditions. Currently, cash flow is being allocated primarily to capital investments, debt reduction and dividend payments.

Capital investment, excluding acquisitions, totaled $603.9 million for the third quarter, compared to $555.3 million in the prior year. Capital projects during the third quarter included 14 new, expanded, or relocated stores and 55 remodels. The Company expects to open, expand or relocate approximately 60 stores and complete between 165 and 180 store remodels during fiscal 2008.

Total debt was $8.0 billion, an increase of $553.0 million from a year ago. On a rolling four-quarters basis, Kroger's net total debt (Table 5) to EBITDA ratio was 1.96 compared with 2.02 during the same period last year. Kroger expects continued improvement in its leverage metrics.

During the third quarter, Kroger repurchased 3.1 million shares of stock at an average price of $27.89 per share for a total investment of $86.6 million. At the end of the quarter, $492.8 million remained under the $1 billion stock repurchase program announced in January 2008.

Fiscal 2008 Year-to-Date Results

During the first three quarters of fiscal 2008, total sales increased 10.9% to $58.7 billion over the same period last year. Identical supermarket sales, excluding fuel, increased 5.4% compared with the same period a year ago. The Company's operating margin for the first three quarters of fiscal 2008 decreased 11 basis points from the same period in fiscal 2007. Excluding fuel, charges for labor unrest in the first quarter of 2007 and the effect of Hurricane Ike, Kroger's operating margin for the first three quarters of fiscal 2008 decreased 21 basis points from the same period last year. Of the 21 basis point decline in fiscal 2008, 10 basis points are related to the higher LIFO charge.

Net earnings for the first three quarters of fiscal 2008 were $900.2 million, or $1.36 per diluted share. Net earnings for the same period last year were $857.6 million, or $1.22 per diluted share.

Guidance

Kroger confirmed its identical supermarket sales guidance for fiscal 2008 and said it expects full-year identical supermarket sales growth of 4.5% to 5.5%, excluding fuel.

The Company raised its fiscal 2008 earnings per share guidance and said it expects full-year earnings of $1.88 to $1.91 per diluted share, excluding the $0.03 per diluted share charge related to Hurricane Ike. This equates to an annual growth rate of 11% to 13% over fiscal 2007 earnings of $1.69 per diluted share and implies a fourth quarter earnings range of $0.49 to $0.52 per diluted share. Kroger's dividend yield of more than 1% further enhances shareholder return. This guidance range considers the cautious mindset of many consumers this holiday season.

"Kroger's third quarter performance demonstrates the strength of our Customer 1st strategy, which continues to benefit customers, associates and shareholders in this uncertain economy. We are on track to deliver another year of solid results and we believe our approach is the right path to generate sustainable growth well into the future," Mr. Dillon said. "Looking ahead to 2009, we are currently projecting identical supermarket sales growth, excluding fuel, of 3% to 5%. This will enable Kroger to generate earnings per share growth that, combined with Kroger's dividend, will create a favorable return for shareholders even in a difficult economic environment."

Kroger, one of the nation's largest retail grocery chains, is honored to celebrate its 125th anniversary in 2008. The Company's more than 320,000 associates serve customers in 2,477 supermarkets and multi-department stores in 31 states under two dozen local banners including Kroger, Ralphs, Fred Meyer, Food 4 Less, Fry's, King Soopers, Smith's, Dillons, QFC and City Market. Kroger associates also serve customers in 778 convenience stores, 392 fine jewelry stores and 750 supermarket fuel centers the Company operates. The Company also operates 41 food processing plants in the U.S. Headquartered in Cincinnati, Ohio, Kroger focuses its charitable efforts on supporting hunger relief, health and wellness initiatives, and local schools and grassroots organizations in the communities it serves. For more information about the Company, please visit our web site at Kroger - Home.

[BadThad]

One year chart:

[BadThad]

Time for a another bounce play. Investors over-reacting to earnings report have sent the stock down 8% to $20.30. I'm looking for the bottom and a nice bounce shortly after.

http://www.rttnews.com/ArticleView.aspx?Id=1066890

[BadThad]

Downgraded:

S&P DOWNGRADES RECOMMENDATION ON SHARES OF KROGER CO TO HOLD FROM BUY
(Standard & Poor's)
KR reports Jul-Q EPS of $0.39 vs. $0.42, $0.04 below our expectations. Results were hurt as identical sales growth excluding fuel slowed to 2.6%, below our 3.5% estimate, and margins narrowed more than we expected. We see earnings pressures increasing as deflationary commodity prices and increased pricing competition result in negative sales leverage. As a result, we are reducing our FY 10 (Jan.) EPS estimate $0.13 to $1.95 and lowering our 12-month target price by $4 to $21, based on our updated comparative and forward 12-month P/E analyses.

[BadThad]

Seems to have bottomed. I'm in at $20.43, time to roll those dice again. Even if it drops, I'm willing to hold as KR is a great company that pays dividends.

[BadThad]

KR bouncing as expected, current stock price $20.81.

[BadThad]

Out at 20.95! CHACHING! Bounce plays ROCK!

[BadThad]

KR reports a loss:

Kroger Reports Third Quarter 2009 Results

Results Include Non-Cash Asset Impairment Charges Totaling $1.62 per Diluted Share
CINCINNATI, Dec. 8 /PRNewswire-FirstCall/ -- The Kroger Co. (NYSE: KR) today reported identical supermarket sales increased 1.3% without fuel in the third quarter of fiscal 2009 ended November 7, 2009, compared with the same period last year.

Total sales, including fuel, in the third quarter were $17.7 billion compared with $17.6 billion for the same period last year. Excluding fuel sales, total sales increased 2.2% over the prior year.

Kroger reported a net loss for the third quarter of $874.9 million, or $1.35 per diluted share. These results include non-cash asset impairment charges totaling $1.05 billion, after-tax, that primarily resulted from a goodwill write-down at the Company's Ralphs division in southern California. Excluding these impairment charges, net earnings for the quarter would have been $176.7 million, or $0.27 per diluted share (Table 6).

Net earnings in the same period last year were $237.7 million, or $0.36 per diluted share.

"The operating environment we saw during the third quarter was more challenging than we anticipated, obscuring some otherwise strong fundamentals in our performance such as exceptional tonnage growth, market share gains, increases in loyal household count, and good cost control. These fundamentals are important to our long-term success," said David B. Dillon, Kroger's chairman and chief executive officer. "In the near-term, our financial results are being pressured by factors including persistent deflation, unusually intense competition and the cautious mindset of customers. We are making adjustments to balance the challenges of the current environment with Kroger's long-term objective for sustainable identical sales and earnings growth, which we believe will create value for shareholders."

Details of Third Quarter Results

Including Kroger's retail fuel operations, FIFO gross margin (Table 1) was 22.71% of sales, a decrease of 79 basis points compared to the third quarter last year. Excluding retail fuel operations, FIFO gross margin decreased 88 basis points. Supermarket selling gross margin on non-fuel sales decreased 109 basis points.

The Company recorded a $9.9 million LIFO charge during the quarter, a decrease of $58.9 million from the same period in the prior year. Excluding retail fuel operations, the LIFO charge decreased 40 basis points as a percent of sales compared to the same period in the prior year.

Including Kroger's retail fuel operations, operating, general, and administrative (OG&A) costs were 17.77% of sales, an increase of 15 basis points compared to the third quarter last year. Excluding retail fuel operations, the southern California impairment charges and the effect of Hurricane Ike in 2008, OG&A would have declined 18 basis points compared with the same period last year as a result of lower utility costs and lower incentive pay.

Financial Strategy

Capital investment, excluding acquisitions and purchases of leased facilities, totaled $552.1 million for the third quarter, compared with $603.9 million for the same period last year. Given the current environment, Kroger now anticipates investing less than $2 billion annually, on average, in capital projects during the next three fiscal years, which is approximately $1 billion less than the Company's original plan for that time period.

Net total debt (Table 5) was $7.7 billion, a decrease of $257.7 million from a year ago. On a rolling four-quarters basis, Kroger's net total debt to EBITDA ratio, adjusted for the southern California impairment charges in 2009, was 1.93 compared with 1.95 during the same period last year. Kroger expects to continue to maintain its debt coverages on a year-over-year basis.

During the third quarter, Kroger repurchased 2.4 million shares of stock at an average price of $21.35 per share for a total investment of $50.5 million. At the end of the quarter, $386.3 million remained under the $1 billion stock repurchase program announced in January 2008.

Fiscal 2009 Year-to-Date Results

For the first three quarters of fiscal 2009, total sales were $58.2 billion compared with $58.9 billion for the same period last year. Excluding fuel sales, total sales increased 3.3% over the same period in the prior year. For the same period, identical supermarket sales, excluding fuel, increased 2.4%.

Kroger reported a net loss of $185.4 million for the first three quarters of fiscal 2009, or $0.28 per diluted share. Excluding the southern California impairment charges, net earnings would have been $866.2 million, or $1.33 per diluted share (Table 6).

Net earnings for the same period last year were $900.2 million, or $1.36 per diluted share.

Kroger's operating margin for the first three quarters of fiscal 2009 decreased 204 basis points compared to the year-ago period. Excluding retail fuel operations, LIFO expense, the southern California impairment charges and the effect of Hurricane Ike in 2008, operating margin would have declined 34 basis points compared to the same period last year.

Fiscal Year 2009 Guidance

Kroger said several factors influenced its performance during the quarter, including persistent deflation, increased competitive activity and the cautious spending behavior of customers. The Company expects these factors to continue to affect its business for the remainder of the year. As a result, Kroger now expects full-year identical supermarket sales growth of 2.0% to 2.5%, without fuel, for fiscal 2009.

Kroger also said it now expects full-year fiscal 2009 earnings of $1.60 to $1.70 per diluted share. This guidance excludes the southern California impairment charges recorded in the third quarter.

"While these revised forecasts are well below what we had expected to deliver for the year, we believe they appropriately reflect the challenges of the current operating environment. Kroger's continued growth in tonnage and loyal households and our competitive advantages position Kroger and our shareholders to benefit once operating conditions begin to normalize," Mr. Dillon said.

Looking ahead to fiscal 2010, Kroger anticipates current operating conditions will extend at least through the first half of the year. Deflation is expected to moderate throughout the year, and Kroger will be cycling many of the price investments put in place during the first half of 2009. The Company believes that the combination of these factors will produce identical sales growth, excluding fuel, and earnings per share growth, both above forecasted 2009 full-year results, excluding the southern California impairment charges.

Kroger, the nation's largest traditional grocery retailer, employs more than 326,000 associates who serve customers in 2,469 supermarkets and multi-department stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's. The Company also operates 773 convenience stores, 392 fine jewelry stores, 850 supermarket fuel centers and 40 food processing plants in the U.S. Kroger, headquartered in Cincinnati, Ohio, focuses its charitable efforts on supporting hunger relief, health and wellness initiatives, and local organizations in the communities it serves. For more information about Kroger, please visit Kroger - Home.

Current stock price: $22.85

[BadThad]

Bottom play in the making, stock down over 12% this morning to $19.96.