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2022-03-03 19:51

Kroger Inc shares closed up 13% after the company reported its financial results for the fourth quarter and full-year 2021. The Kroger Company is an American retailer that runs supermarkets and multi-department shops around the country.
Here’s what was noteworthy in Kroger Q4 results
The company has generated net sales of $33.0 billion and $137.9 billion for the fourth quarter and full-year 2021 compared to $30.7 billion and $132.5 billion in the fourth quarter and full-year 2020. While the total company sales without including fuel rose by 3.7% and 0.2% in the fourth quarter and full-year 2021 compared to the same period in the previous year.

For the fourth quarter, gross margin was 22.2% of sales. In comparison to the same time the previous year, the FIFO gross margin rate, excluding fuel, improved by 3 basis points. The stable gross margin rate reflects sourcing savings that have been mitigated by strategic pricing initiatives and rising supply chain expenses.

Again for the full year 2021, gross margin was 22.0% of sales. In comparison to the same time last year, the FIFO gross margin rate, excluding fuel, fell by 43 basis points. This decline was mostly due to increasing supply chain costs and strategic pricing initiatives, which were offset in part by sourcing benefits and increases in alternative earnings.

For the fourth-quarter LIFO charge was $20 million, relative to an $84 million credit in the same time the previous year. While for the full year 2021, the LIFO charge was $197 million, compared to a credit of $7 million in 2020. This rise was due to rising inflation in the majority of categories, with groceries and meat being the main contributions.

Other prominent figures in the earnings report
Excluding fuel and adjustment charges, the Operating, General, and Administrative rates increased by 7 basis points for the fourth quarter of 2021. The Operating, General, and Administrative rates fell 61 basis points for the entire year 2021, excluding fuel and adjustment factors, reflecting a drop in COVID-related expenses and cost-cutting actions offset in part by considerable investments in associates.

The 2021 income tax rate was 18.8 percent, down from 23.2 percent in the same period the previous year. Because of the favorable outcome of income tax audit exams encompassing many years, the current year tax rate is lower than the previous year.

Commenting on the earnings report, Chairman and CEO Rodney McMullen said:

"Our strategy of leading with fresh and accelerating with digital propelled Kroger to record performance in 2021, on top of record results in 2020. We are incredibly proud of our associates who continue to deliver for our customers through the pandemic.

Including today’s price action, the stock is now up over 20% for the year. The $40.51 billion company trades at a PE multiple of 41.37 at present.