SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 22, 1998
THE KROGER CO.
(Exact name of registrant as specified in its charter)
An Ohio Corporation No. 1-303 31-0345740
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
1014 Vine Street
Cincinnati, OH 45201
(Address of principal
executive offices)
Registrant's telephone number: (513) 762-4000
<PAGE>
Item 5. Other Events
- ------ ------------
On January 22, 1998, the Company released its
earnings for the Fourth Quarter and Fiscal Year 1997
in the form attached hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits
- ------ ---------------------------------
(c) Exhibits
99.1 Other Exhibits--Earnings Release for
Fourth Quarter and Fiscal Year 1997
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereto duly authorized.
THE KROGER CO.
January 22, 1998 By: (Paul W. Heldman)
---------------
Paul W. Heldman
Senior Vice President,
Secretary and General
Counsel
<PAGE>
EXHIBIT INDEX
--------------
Exhibit
- -------
99.1 Other Exhibits--Earnings Release for Fourth Quarter
and Fiscal Year 1997
<PAGE>
EXHIBIT 99.1
KROGER OPER EARNS PER SHARE:
56 CENTS VS 48 CENTS
CINCINNATI, Ohio, January 22, 1998 --- The Kroger Co.
(NYSE: KR) said today that 1997 fourth quarter earnings before
an extraordinary item rose 17 percent to $147.1 million from
$125.5 million in the 1996 fourth quarter. On a diluted per
share basis, earnings before the extraordinary item rose 17
percent to 56 cents from 48 cents.
Kroger's fourth quarter and full-year results set records
for sales, operating cash flow, earnings, and earnings per
share.
Fourth quarter operating cash flow -- pretax earnings
before interest, depreciation, LIFO, and extraordinary items
- -- rose 9 percent to $380.8 million from $349.3 million.
Total Company sales in the quarter increased 5 percent to
a record $6.5 billion from $6.2 billion in the 1996 fourth
quarter. Identical food store sales rose 0.7 percent.
Comparable store sales, which include relocations and
expansions, were up 3.0 percent in the quarter.
For 1997, earnings before extraordinary items were $444.0
million, or $1.69 per diluted share, compared to $352.7
million, or $1.36 per share, in 1996. Full year operating
cash flow rose to a record $1.385 billion from $1.224 billion.
Total Company sales were $26.6 billion, a 5.5 percent increase
over 1996.
Kroger Chairman and Chief Executive Officer Joseph A.
Pichler said the strong fourth quarter and full year
performance resulted from the Company's strategy of investing
in new stores, logistics, and technologies while improving the
performance of existing assets.
"Despite cost deflation in many product categories and
intense competition for sales, all segments of our business
continued to improve in 1997," Pichler said. "Our retail
operations benefited from coordinated purchases and
improvements in logistics, distribution, and technology.
Kroger's private label business also was a strong contributor
throughout the year to both sales and profits," he noted.
Kroger's financial structure improved in 1997. The major
rating services upgraded the Company's long-term debt to
investment grade. Net interest expense for 1997 declined 4.7
percent to $285.9 million, the lowest since 1988. Net total
debt decreased by $216 million to 3.20 billion.
During 1997, Kroger opened, expanded or relocated 96 food
stores, increasing overall square footage by 5.7 percent. For
1998, the Company said it expects to complete approximately 90
store projects which will enable Kroger to grow retail square
footage by approximately 5 percent.
The foregoing statements regarding 1998 plans are forward
looking statements, based on 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 the capital markets, labor disputes, material
shortages, or delays in completing real estate projects.
<PAGE>
<TABLE>
The Kroger Co.
Sales and Earnings
<CAPTION>
4th Qtr 4th Qtr
1997 1996 Percent
12/27/97 12/28/96 Change
-------- -------- -------
<S> <C> <C> <C>
Sales $6,509,501,887 $6,199,156,375 5.01
EBITD <F1> $ 380,803,597 $ 349,268,567 9.03
LIFO $ 4,758,719 $ 2,173,602
Interest $ (62,631,887) $ (67,006,475)
Depreciation $ (94,637,026) $ (86,580,221)
--------------- ---------------
Pre-tax Earnings
before
extraordinary
item $ 228,293,403 $ 197,855,473
Tax expense $ (81,188,285) $ (72,336,735)
--------------- ---------------
Earnings before
extraordinary
item $ 147,105,118 $ 125,518,738 17.2
Extraordinary
item <F2> $ (23,330,230) $ (84,342)
--------------- --------------
Net Earnings $ 123,774,888 $ 125,434,396
=============== ==============
Basic earnings
(loss) per
common share:
From operations $ 0.58 $ 0.50
From extraordinary
item <F2> $ (0.09) $ (0.00)
--------------- ---------------
Basic net
earnings per
common share $ 0.49 $ 0.50
================ ================
Number of
shares used in
basic per share
calculation 254,615,451 252,993,144
Diluted
earnings (loss)
per common share:
From operations $ 0.56 $ 0.48 16.67
From extraordinary
item <F2> $ (0.09) $ (0.00)
--------------- ---------------
Diluted net
earnings per
common share $ 0.47 $ 0.48
=============== ===============
Number of
shares used in
diluted per share
calculation 263,749,709 260,960,975
</TABLE>
[FN]
<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.
<PAGE>
<TABLE>
<CAPTION>
4 Quarters 4 Quarters Percent
1997 1996 Change
--------------- --------------- -------
<S> <C> <C> <C>
Sales $26,567,348,448 $25,170,908,953 5.5
EBITD <F1> $ 1,384,770,575 $ 1,223,593,781 13.2
LIFO $ (6,241,281) $ (12,526,398)
Interest $ (285,945,010) $ (299,984,361)
Depreciation $ (380,221,320) $ (343,769,715)
---------------- ----------------
Pre-tax Earnings
before
extraordinary
item $ 712,362,964 $ 567,313,307
Tax expense $ (268,331,104) $ (214,578,000)
---------------- ----------------
Earnings before
extraordinary
item $ 444,031,860 $ 352,735,307 25.9
Extraordinary
item <F2> $ (32,375,034) $ (2,862,050)
---------------- ----------------
Net Earnings $ 411,656,826 $ 349,873,257
================ ================
Basic earnings
(loss) per
common share:
From operations $ 1.75 $ 1.41
From
extraordinary
item <F2> $ (0.13) $ (0.01)
---------------- ---------------
Basic net
earnings per
common share $ 1.62 $ 1.40
=============== ==============
Number of
shares used in
basic per share
calculation 254,283,864 250,979,020
Diluted
earnings (loss) per
common share:
From operations $ 1.69 $ 1.36 24.26
From
extraordinary
item <F2> $ (0.12) $ (0.01)
--------------- ---------------
Diluted net
earnings per
common share $ 1.57 $ 1.35
=============== ===============
Number of
shares used in
diluted per share
calculation 262,860,380 258,836,576
</TABLE>
[FN]
<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.
<PAGE>
