Benzinga | Jun 17, 2021 09:30AM EDT

Kroger Beats On Q1 Earnings, Raises FY21 Guidance

* Kroger Co (NYSE:KR) reported first-quarter FY21 sales of $41.3 billion, down 0.6% year-on-year, beating the consensus estimate of $39.78 billion.

* Same-store sales, excluding fuel, fell 4.1% Y/Y. On a two-year comparison basis, the same-store sales increased 14.9%.

* Digital sales grew 16% Y/Y, while alternative profit business growth was fueled by Retail Media and Kroger Personal Finance.

* Gross margin was 22.6%. FIFO gross margin rate, excluding fuel, decreased 65 basis points Y/Y primarily related to sales deleverage, higher shrink, continued price investments, and charges related to COVID-19.

* Operating profit was $805 million, down 39% Y/Y, with the operating margin of 1.9% falling 129 basis points Y/Y.

* Adjusted EBITDA was $6.7 billion, and net total debt to adjusted EBITDA ratio was 1.79.

* Adjusted EPS was $1.19 per share, down 2.46% Y/Y, beating the analyst consensus estimate of $1.01.

* Kroger's Board of Directors has approved a $1 billion share repurchase program.

* The company held $2.3 billion in cash and equivalents at the end of Q1.

* Guidance: The supermarket chain raised its adjusted EPS guidance for FY21 to $2.95 and $3.10 in 2021, versus its prior range of $2.75 to $2.95, higher than the $2.83 consensus.

* "Kroger is even better positioned to connect with our customers than we were prior to the pandemic as a result of our relentless focus on leading with fresh and accelerating with digital," said Rodney McMullen, Chief Executive Officer.

* Price action: KR shares are trading lower by 0.19% at $37.48 in the premarket on the last check Thursday.