Kroger Co (KR) has reported 56.47 percent plunge in profit for the quarter ended May 20, 2017. The company has earned $303 million, or $0.32 a share in the quarter, compared with $696 million, or $0.71 a share for the same period last year. Revenue during the quarter grew 4.86 percent to $36,285 million from $34,604 million in the previous year period. Gross margin for the quarter contracted 87 basis points over the previous year period to 22.06 percent. Total expenses were 98.29 percent of quarterly revenues, up from 96.53 percent for the same period last year. That has resulted in a contraction of 175 basis points in operating margin to 1.71 percent.
Operating income for the quarter was $622 million, compared with $1,200 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $5,768 million compared with $5,844 million in the prior year period. At the same time, adjusted EBITDA margin contracted 99 basis points in the quarter to 15.90 percent from 16.89 percent in the last year period.
Comments from chairman and chief executive officer Rodney McMullen "We remain focused on our strategy. This will make a difference for our customers and create value for our shareholders. We are running the business with an eye toward where the customer is going. Customers tell us they want to connect with us in multiple ways with the help of friendly associates to easily provide meals to their families at prices that enable them to stretch their budgets. We are committed to providing that experience, and we will not lose on price.
For fiscal year 2017, the company expects diluted earnings per share to be in the range of $1.74 to $1.79. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2 to $2.05 on adjusted basis.
Operating cash flow improvesKroger Co has generated cash of $2,308 million from operating activities during the quarter, up 11.01 percent or $229 million, when compared with the last year period. The company has spent $744 million cash to meet investing activities during the quarter as against cash outgo of $1,051 million in the last year period. It has incurred net capital expenditure of $734 million on net basis during the quarter, down 27.97 percent or $285 million from year ago period.
The company has spent $1,531 million cash to carry out financing activities during the quarter as against cash outgo of $914 million in the last year period.
Cash and cash equivalents stood at $356 million as on May 20, 2017, down 8.95 percent or $35 million from $391 million on May 21, 2016.
Debt moves up
Kroger Co has witnessed an increase in total debt over the last one year. It stood at $13,444 million as on May 20, 2017, up 8.54 percent or $1,058 million from $12,386 million on May 21, 2016. Interest coverage ratio deteriorated to 3.51 for the quarter from 7.74 for the same period last year.
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