Kroger Quarterly Performance Report: Q4 2021

June 22, 2022

The Kroger Co. (NYSE: KR) headquartered in Cincinnati, OH, is one of the world's largest food retailers, with fiscal 2021 sales of $137.9B

Fourth Quarter Highlights

Sales without gasoline climbed by 4.0 percent, while the two-year stack increased by 14.6 percent
The two-year stack of Digital Sales increased by 105 percent
Operating Profit of $965 million; Adjusted FIFO Operating Profit of $1,014 million
EPS of $0.75; Adjusted EPS of $0.91

Total company sales were $33.0 billion in the fourth quarter, compared to $30.7 billion for the same period last year
The expense ratio went down from approximately 100% in the fourth quarter of 2020 to 97.08% in the same period this year
OGA Expense Ratio came down to 16.68% in the fourth quarter of 2021 from 20.62% for the same period last year
Operating Profit Ratio increased from (0.51)% in Q4 2020 to 2.92% for the same period this year
Net Earnings Attributable to Kroger Co. Ratio increased from (.25)% in Q4 2020 to 1.71% for the same period this year

In comparison to the same period the previous year, total business revenues grew 3.7 percent
For the fourth quarter, the gross margin was 22.2 percent of sales. In comparison to the same period the previous year, the FIFO gross margin rate, excluding fuel, climbed 3 basis points. Our gross margin rate has been stable due to sourcing benefits, which have been mitigated by strategic price initiatives and rising supply chain costs
The fourth-quarter LIFO penalty was $20 million, compared to an $84 million credit in the same quarter last year. Higher inflation in most categories contributed to the $104 million increase in the levy, with food and meat being the biggest drivers
Excluding fuel and adjustment charges, the operating, general, and administrative rates increased by 7 basis points. Significant expenditures in associates, including a year-end Associate, Thank You reward and other asset impairments, drove the increase in OG&A, which was partially offset by lower COVID-related costs, sales leverage, and the implementation of cost-cutting initiatives
The fourth-quarter income tax rate was 20.5 percent

The first part of the in-store End-to-End Fresh program was completed successfully, allowing customers to enjoy extra days of freshness. The initiative is currently being expanded to certain stores across the country
During the quarter, our brands introduced 72 new products, many of which were designed to help people prepare easy meals at home, such as our Simple Truth skillet meals for two and Kroger brand multi-serve tray dinners
In 260 establishments, the changeover of specialty cheese shops to the Murray's Cheese brand was completed
In the Houston and Dallas divisions, a Kroger Floral experiment was launched in collaboration with DoorDash, allowing consumers to receive fresh floral delivery in as short as one hour
Customers can enjoy made-to-order restaurant meals from a variety of participating restaurants at the first two Kitchen United MIX locations

Opened an Ocado-powered Customer Fulfillment Center in Forest Park, Georgia, as well as a cross-dock, spoke facility in the Indianapolis region
Customer Fulfillment Centers are being built in the Cleveland area, new geography, and North Carolina
The company announced the opening of a cross-dock spoke factory in Oklahoma City, a new market for the company
Newsweek named it one of "America's Best Loyalty Programs 2022."
Starbucks Mobile Order & Pay was launched in more than 150 stores, allowing customers to order ahead and pick up in-store via the Starbucks mobile app
Neustar awarded me the ANA Genius Adoption Award for integrating analytics in marketing
Collaboration with Nuro has been expanded in order to continue changing the customer experience with the debut of Nuro's third-generation autonomous delivery vehicle

With full benefits, the average hourly income at the Kroger Family of Companies has increased to $17, and the average hourly rate has increased to nearly $22
Through the Helping Hands Fund, $5.5 million was provided to assist employees with unanticipated problems and catastrophe relief
On the Human Rights Campaign Foundation's 2022 Corporate Equality Index, it was named one of the Best Places to Work for LGBTQ Equality for the fourth year in a row
In 2021, more than 3,000 associates, 90% of whom are hourly, benefited from Kroger's best-in-class education support program

In 2021, Zero Hunger | Zero Waste donated 499 million meals and $343 million in total philanthropic giving to help communities end hunger
The UN World Food Programme's Ukraine Emergency Fund is providing emergency food aid to Ukrainian refugees. All gifts made by workers and consumers will be matched up to $250,000 by the company
The COVID-19 vaccine has now been administered to over 10 million people by Kroger Health
The 2022 America Pharmacists Association Immunization Champion Award was given to Kroger Health in recognition of the company's outstanding achievements in increasing immunization rates in communities
Customers can get free N95 masks at retail locations with pharmacies thanks to a partnership with the Biden Administration
Hand sanitizer, masks, and gloves were donated to charitable organizations dedicated to promptly delivering to underserved communities
An additional $5 million was donated to The Kroger Co. Foundation Racial Equity Fund to help stimulate creative methods to help communities become more equitable and inclusive
Launched an exclusive, first-of-its-kind agreement with Loop in the United States to introduce a range of products in reusable packaging rather than single-use plastic

This is an excerpt from the report. To download the full report, fill in your details below.