EXHIBIT 99.1
KROGER 3RD QUARTER EARNINGS PER SHARE:
47 CENTS VS. 37 CENTS
CINCINNATI, Ohio, October 19, 1998 --- The Kroger Co. (NYSE:
KR) said today that earnings, earnings per share, operating cash
flow and sales in the 1998 third quarter all established Company
records.
Sales for the third quarter increased 4.4 percent to a record
$8.02 billion from $7.69 billion in the 1997 third quarter. Food
store sales grew 4.9 percent from the third quarter 1997.
Identical food store sales, excluding expansions and relocations,
rose 2.1 percent from the year ago period. Comparable store sales,
including expansions and relocations, increased 3.6 percent in the
third quarter. EBITD rose 13.5 percent to a third quarter record
of $406.9 million from $358.5 million in the third quarter of 1997.
In releasing the quarterly results, Kroger Chairman and Chief
Executive Officer Joseph A. Pichler said, "These results reflect
the success of the strategic measures that we have undertaken over
the past year. Consolidation of administrative functions,
coordinated procurement and logistics investments have clearly
helped us achieve significant economies of scale. Our recent
decision to centralize merchandising and procurement for drug and
general merchandise will result in lower acquisition costs and
stronger sales for these categories. In addition to these
benefits, we expect our new structure to reduce overhead."
Sales year-to-date rose to $20.9 billion from $20.1 billion
for the first three quarters of 1997. Excluding one-time expenses
incurred in the first half of 1998, EBITD year-to-date is $1.1
billion versus $1.0 billion for the first three quarters of 1997.
Year-to-date diluted earnings per share from operations, excluding
one-time expenses, are $1.35 compared to $1.13 for the same period
a year ago.
Net total debt declined $77 million in the third quarter to
$3.19 billion. Net interest expense declined 9.7 percent in the
third quarter to $76.9 million from $85.2 million in the prior year
third quarter.
During the third quarter, Kroger opened, acquired, or expanded
34 stores, versus 26 opened, acquired or expanded stores in the
1997 third quarter.
The forward looking statements above are based on the
information available to the Company as of the date of this
release. The Company's actual results could differ materially due
to competitive action, changes in capital markets, labor disputes,
material shortages, or delays in completing real estate projects.
The Kroger Co.
Sales and Earnings
(in millions, except per share amounts)
3rd Qtr 3rd Qtr Percent
1998 1997 Change
10/3/98 10/4/97
--------- --------- -------
Sales $8,023.9 $7,686.6 4.4
========= =========
EBITD <F1> $ 406.9 $ 358.5 13.5
LIFO $ (5.0) $ (3.0)
Interest $ (76.9) $ (85.2)
Depreciation $ (124.4) $ (112.0)
--------- ---------
Pre-tax earnings
before
extraordinary
item $ 200.6 $ 158.3 26.7
Tax expense $ (76.2) $ (61.7)
--------- ---------
Earnings before
extraordinary
item $ 124.4 $ 96.6
Extraordinary
item <F2> $ (6.5) $ (0.8)
--------- ---------
Net earnings $ 117.9 $ 95.8
========= =========
Diluted earnings
(loss) per
common share:
From
operations $ 0.47 $ 0.37 27.0
From extraordinary
item <F2> $ (0.02) $ (0.00)
---------- ----------
Diluted net
earnings per
common
share $ 0.45 $ 0.37
========== ==========
Number of
shares used in
diluted per share
calculation 265.4 263.1
<F1> EBITD represents pretax earnings before interest,
depreciation, and LIFO as defined in the Company's Bank
Credit Agreement.
<F2> Represents the after-tax loss from the early retirement of
debt.
The Kroger Co.
Sales and Earnings
Without One-Time Expenses and Accounting Change
(in millions, except per share amounts)
3 Quarters 3 Quarters Percent
1998 1997 Change
10/3/98 10/4/97
---------- ---------- --------
Sales $20,854.3 $20,057.8 4.0
========== ==========
EBITD <F1> $ 1,111.3 $ 1,004.0 10.7
LIFO $ (13.0) $ (11.0)
Interest $ (204.1) $ (223.3)
Depreciation $ (315.9) $ (285.6)
---------- ----------
Pre-tax earnings
before
extraordinary
item $ 578.3 $ 484.1 19.5
Tax expense $ (219.8) $ (187.1)
---------- ----------
Earnings before
extraordinary
item $ 358.5 $ 297.0
Extraordinary
item <F2> $ (10.8) $ (9.0)
---------- ----------
Net earnings $ 347.7 $ 288.0
========== ==========
Diluted earnings
(loss) per
common share:
From
operations $ 1.35 $ 1.13 19.5
From extraordinary
item <F2> $ (0.04) $ (0.03)
---------- -----------
Diluted net
earnings per
common
share $ 1.31 $ 1.10
========== ===========
Number of
shares used in
diluted per share
calculation 265.2 262.6
<F1> EBITD represents pretax earnings before interest,
depreciation, and LIFO as defined in the Company's Bank
Credit Agreement.
<F2> Represents the after-tax loss from the early retirement of
debt.
The Kroger Co.
Sales and Earnings
With One-Time Expenses and Accounting Change
(in millions, except per share amounts)
3 Quarters 3 Quarters Percent
1998 1997 Change
10/3/98 10/4/97
---------- ---------- --------
Sales $ 20,854.3 $ 20,057.8 4.0
========== ==========
EBITD <F1><F2> $ 969.2 $ 1,004.0 (3.5)
LIFO $ (13.0) $ (11.0)
Interest $ (204.1) $ (223.3)
Depreciation $ (315.9) $ (285.6)
---------- ----------
Pre-tax earnings
before
extraordinary
item $ 436.2 $ 484.1 (9.9)
Tax expense $ (165.8) $ (187.1)
---------- ----------
Earnings before
extraordinary
item $ 270.4 $ 297.0 (9.0)
Extraordinary
item <F3> $ (10.8) $ (9.0)
---------- ----------
Net earnings $ 259.6 $ 288.0
========== ==========
Diluted earnings
(loss) per
common share:
From
operations $ 1.02 $ 1.13 (9.7)
From extraordinary
item <F3> $ (0.04) $ (0.03)
---------- -----------
Diluted net
earnings per
common
share $ 0.98 $ 1.10
========== ===========
Number of
shares used in
diluted per share
calculation 265.2 262.6
<F1> 1998 EBITD includes the effect of one-time expenses totaling
$52.4 million ($32.5 million after tax or 12 cents per
diluted share). These expenses relate to the logistics
initiatives which became operational in the 2nd Quarter,
$40.8 million, and expenses primarily due to closing
facilities resulting from the consolidation of the Company's
Texas operations, $11.6 million.
<F2> In addition to the expenses described in footnote 1, the
three quarters 1998 EBITD includes expenses totaling $89.7
million ($55.6 million after-tax, or 21 cents per diluted
share) related to a change in the method of accounting for
inventory.
<F3> From the early retirement of debt.