Smith’s, PriceRite owner meets earnings forecasts

Tuesday, Dec. 5, 2000 | 11:12 a.m.

SUN STAFF AND WIRE REPORTS

CINCINNATI -- Third-quarter earnings at Kroger Co., the nation's largest grocery chain, met analysts' expectations as Kroger brand products continued to perform well.

In Las Vegas, Kroger is a big player in the grocery store market with its Smith's Food & Drug and PriceRite chains.

For the three months ended Nov. 4, Kroger earned $202 million, or 24 cents per share, compared with $129.4 million, or 15 cents per share, in the year-ago period, the company said Tuesday.

Excluding costs related to mergers and one-time expenses, and before extinguishment of debt, Kroger earned $231.4 million, or 28 cents per share, compared with $202 million, or 24 cents a share in the third quarter of 1999. The results met expectations of analysts surveyed by First Call/Thomson Financial.

Sales increased 6 percent to $10.96 billion, compared with $10.33 billion a year ago.

Stephen Chick, an analyst with J.P. Morgan in New York, said he had been expecting slightly lower results. "They beat my number by a penny," said Chick. "Overall, an OK quarter."

For the first nine months of 2000, Kroger earned $523.2 million, or 62 cents a share, on revenue of $36.31 billion. In the year-ago period, Kroger earned $381.9 million, or 45 cents per share, on revenue of $34.11 billion. Both periods include one-time items.

In the third quarter, Kroger opened, expanded, relocated or acquired 35 food stores and stepped up its emphasis on store brands, introducing more than 480 items.

Kroger reduced net working capital to $302 million, a decrease of $85 million from the end of the third quarter of 1999, and repurchased about 4.7 million shares of common stock at a cost of $103 million.

Kroger operates 2,343 supermarkets and multi-department stores in 31 states under nearly two dozen brand names. Kroger also operates 787 convenience stores, 396 fine jewelry stores, 57 supermarket fuel centers and 42 food processing plants.