EXHIBIT 99.1 ------------ KROGER 3RD QTR PER SHARE BEFORE CHARGE: 36 CENTS VS 27 CENTS CINCINNATI, Ohio, October 22, 1997 --- The Kroger Co. (NYSE: KR) said today that 1997 third quarter earnings per share before an extraordinary charge increased 33 percent to 36 cents per fully diluted share from 27 cents in last year's third quarter. The Company said its third quarter results established new records for net earnings, earnings per share, cash flow, and sales. Last year's earnings per share were reduced approximately one cent from the effect of work stoppages in Colorado. Earnings before the extraordinary charge increased 33 percent to $96.5 million from $72.3 million in the 1996 third quarter. After the extraordinary charge of $0.8 million for the early retirement of debt, Kroger's net earnings were $95.7 million versus $71.4 million in the prior year quarter. Operating cash flow (earnings before interest, taxes and depreciation) rose 12.6 percent to $358.5 million, compared to $318.4 million in last year's third quarter. Total sales rose 4.7 percent to $7.69 billion from $7.34 billion. Identical food store sales decreased 0.7 percent in the quarter, reflecting food cost deflation as well as the impact of Kroger store openings on nearby Company stores. Comparable store sales, which include results from expanded and relocated stores, increased 2.5 percent. Kroger Chairman and Chief Executive Officer Joseph A. Pichler said the Company's third quarter results were especially satisfying because of the challenging sales environment in which they were achieved. "Despite cost deflation and continued intense competition for sales, Kroger's performance remains strong," Pichler said. During the third quarter, interest expense declined 7.2 percent to $85.2 million. Total net debt at the end of the third quarter was $3.27 billion, a decrease of $355 million from the 1996 third quarter. Kroger opened or expanded 26 food stores in the third quarter, compared to 31 new stores and expansions in the previous year quarter. The Kroger Co. Sales and Earnings 3rd Qtr 3rd Qtr Percent 10/4/97 10/5/96 ________ _________ _______ Sales $7,686,639,826 $7,343,132,896 4.7 ============== ============== ====== EBITD <F1>$ 358,495,988 $ 318,361,978 12.6 LIFO $ (3,000,000) $ (7,700,000) Interest $ (85,213,482) $ (91,829,325) Depreciation $ (112,008,527) $ (101,192,335) _______________ _______________ Pre-tax earnings before extraordinary item $ 158,273,979 $ 117,640,318 Tax expense $ (61,744,165) $ (45,291,522) ______________ ______________ Earnings before extraordinary item $ 96,529,814 $ 72,348,796 33.4 Extraordinary item <F2>$ (801,951) $ (927,993) _______________ _______________ Net earnings $ 95,727,863 $ 71,420,803 =============== =============== Primary earnings (loss) per common share: From operations $0.36 $0.28 From extraordinary item <F2> $0.00 $0.00 ________ _________ Primary net earnings per common share $0.36 $0.28 ======== ========== Fully-diluted earnings (loss) per common share: From operations $0.36 $0.27 From extraordinary item <F2> ($0.00) ($0.00) _________________ ________________ Fully-diluted net earnings per common share $0.36 $0.27 ================= ================ Number of shares used in primary per share calculation 267,519,130 262,999,982 Number of shares used in fully-diluted per share calculation 268,042,921 264,553,622 <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. 3 Qtrs 3 Qtrs Percent 10/4/97 10/5/96 ________ _________ _______ Sales $20,057,846,561 $18,971,752,578 5.7 =============== ============== ====== EBITD <F1>$ 1,003,966,978 $ 874,325,214 14.8 LIFO $ (11,000,000) $ (14,700,000) Interest $ (223,313,123) $ (232,977,886) Depreciation $ (285,584,294) $ (257,189,494) _______________ _______________ Pre-tax earnings before cumulative effect adjustment and extraordinary loss $ 484,069,561 $ 369,457,834 Tax expense $ (187,142,819) $ (142,241,265) ______________ ______________ Earnings before cumulative effect adjustment and extraordinary loss $ 296,926,742 $ 227,216,569 30.7 Extraordinary loss <F2> $ (9,044,804) $ (2,777,708) ______________ ________________ Net earnings $ 287,881,938 $ 224,438,861 28.3 ============== ================ Primary earnings (loss) per common share: From operations $1.11 $0.87 From extraordinary loss <F2> ($0.03) ($0.01) ______________ ________________ Primary net earnings per common share $1.08 $0.86 ============== ================ Fully-diluted earnings (loss) per common share: From operations $1.11 $0.86 From extraordinary loss <F2> ($0.03) ($0.01) ____________ __________ Fully-diluted net earnings per common share $1.08 $0.85 ============ ========== Number of shares used in primary per share calculation 266,804,695 262,019,628 Number of shares used in fully-diluted per share calculation 268,291,887 263,964,346 <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.