Kroger swings to loss on union costs
CINCINNATI — Kroger posted a loss in the quarter ended Jan. 28, attributing the loss to costs associated with consolidating its pension plan for union workers.
The grocer, which counts among its banners Kroger, Ralphs and Food 4 Less, lost $306.9 million in the quarter, compared with a profit of $278.8 million in the year-ago period.
Total sales in the quarter rose 7.7% to $21.4 billion. Excluding fuel, sales rose 5%. Same-store sales increased 4.9%.
The pension-related costs, which impacted earnings in the quarter, had been announced in December, when the company said that four of the union pension funds to which it contributes were merging into a new fund as of the start of this year. Kroger contributed $650 million to the new fund in January as part of the agreement.
"We are very pleased with Kroger's outstanding performance in fiscal year 2011 and strong fourth quarter financial results," said David Dillon, Kroger's chairman and CEO. "Our Customer 1st strategy is delivering value for our customers, who are rewarding Kroger with their loyalty. Customer loyalty, in turn, is driving sales and shareholder returns."
For fiscal year 2012, Kroger anticipates identical supermarket sales growth, excluding fuel, of approximately 3% to 3.5%. Earnings per share are expected to grow between 6% and 8%.