EXHIBIT 99.1
KROGER 1QTR PER SHARE EARNINGS
BEFORE EXTRAORDINARY ITEM:
69 CENTS VS. 59 CENTS
CINCINNATI, Ohio, April 16, 1997 --- The Kroger Co.
(NYSE: KR) said today that first quarter earnings before an
extraordinary item increased 21 percent to a record $92.3
million from $76.5 million in the 1996 first quarter. On a
fully diluted per share basis, earnings before the
extraordinary item increased 17 percent to a pre-split 69
cents from 59 cents, also a record.
After an extraordinary item of $5.2 million for early
retirement of debt, Kroger's 1997 first quarter net earnings
totaled $87.0 million, or a pre-split 65 cents per fully
diluted share, compared with net earnings of $75.4 million, or
58 cents per share, in the 1996 first quarter.
First quarter operating cash flow -- earnings before
interest expense, taxes, depreciation, and LIFO -- increased
13 percent to a record $309.6 million from $274.1 million.
Sales in the first quarter increased 6.1 percent to a
record $6.14 billion from $5.78 billion. Comparable food
store sales, which include results from relocated or expanded
stores, increased 4.1 percent. Food store sales increased 5.6
percent, and identical food store sales improved 0.4 percent.
Kroger Chairman and Chief Executive Officer Joseph A.
Pichler said: "We are especially pleased with Kroger's record
sales, cash flow, earnings and earnings per share results in
the first quarter because they compare favorably with the
Company's strong performance in the first quarter of 1996."
He added: "We have been able to sustain our record of
consistent current performance while implementing a
substantial capital investment strategy to rapidly expand
store square footage; improve technology and logistics; and
consolidate distribution, accounting, and data processing
functions that enhance productivity and reduce costs."
During the quarter, Kroger opened, expanded or relocated
31 stores, including the acquisition of seven stores in
Arkansas from Harvest Foods, Inc. Food store square footage
increased 7.6 percent over last year's first quarter.
During the quarter, the Company announced plans to close
two satellite distribution operations serving two Kroger
retail divisions. These closings are in addition to the five
previously announced or closed in 1996. In addition, the
Company's King Soopers division sold its warehouse and
distribution operations to a third-party logistics management
firm. Pichler stated that these actions will improve
distribution efficiency and reduce costs.
Net long-term debt declined $81 million in the 1997 first
quarter as compared to the previous year's first quarter to a
level of $3.49 billion.
The Company noted that Standard & Poor's on Monday
(4/14/97) raised Kroger's corporate credit and senior and
subordinated debt rating, citing the Company's "solid and
consistent performance in recent years." Previously, Fitch
Investor Services, L.P. and Moody's Investors Service upgraded
the Company's debt to "investment grade," citing Kroger's
consistent financial performance.
THE KROGER CO.
SALES AND EARNINGS
1ST QUARTER 1ST QUARTER PERCENT
1997 1996 CHANGE
3/22/97 3/23/96
Sales $6,139,412,657 $5,784,253,810 6.1
============== ==============
EBITD <F1> $ 309,635,803 $ 274,143,088 12.9
LIFO $ (4,500,000) $ (3,500,000)
Interest $ (69,746,833) $ (70,625,919)
Depreciation $ (85,372,998) $ (75,643,136)
---------------- ---------------
Pre-tax earnings
before extraordinary
item $ 150,015,972 $ 124,374,033 20.6
Tax expense $ (57,756,150) $ (47,884,003)
---------------- ---------------
Earnings before
extraordinary item $ 92,259,822 $ 76,490,030 20.6
Extraordinary
item <F2> $ (5,210,005) $ (1,084,114)
--------------- --------------
Net earnings $ 87,049,817 $ 75,405,916
=============== ================
fully diluted earnings
per common share:
From operations $0.69 $0.59 16.9
From extraordinary
item <F2> ($0.04) ($0.01)
--------------- ----------------
Fully diluted net
earnings per
common share $0.65 $0.58
================ ==================
Number of shares used in
fully-diluted per share
calculation 133,587,927 130,610,705
POST-SPLIT <F3>
Fully diluted earnings
per common share:
From operations $0.35 $0.29
From extraordinary
Item <F2> ($0.02) ($0.00)
----------------- ------------------
Fully diluted net
earnings per
common share $0.33 $0.29
================= ==================
Number of common shares
used in fully diluted per
share calculation 267,175,854 261,221,410
[FN]
<F1> EBITD represents pre-tax earnings before interest,
depreciation and LIFO but after the costs associated with
the adoption of FASB 106.
<F2> Represents the after-tax loss from the early retirement
of debt.
<F3> Represents earnings per share based on the increased
number of shares to be issued in connection with the
Company's 2-for-1 stock split announced in March.
[/FN]