The Kroger Co. reported its third quarter 2019 results and provided a Restock Kroger progress update on the company's three-year transformation plan, but following a portfolio review, it has decided to divest its interest in Lucky's Market.
According to Reuters, Chairman and Chief Executive Officer Rodney McMullen said, "The amount of investment that it would take for Lucky’s to be a meaningful contributor to Kroger overall and the efforts that it would take, we just didn’t think it created a good return for the investments."
Concerning Q3, total company sales were $28 billion in the third quarter, compared to $27.8 billion for the same period last year. Excluding fuel and dispositions, sales grew 2.7 percent.
"Kroger's customer obsession and focus on operational excellence continued to generate positive results in the third quarter," said McMullen. "Identical sales were the strongest since we started Restock Kroger and gross margin rate, excluding fuel and pharmacy, improved slightly in the quarter. At the same time, we continued to reduce costs as a percentage of sales.
"We are using the power of Kroger's stable and growing supermarket business to create meaningful incremental operating profit through the alternative profit stream businesses, which adds up to a business built for long-term growth that generates consistently attractive total shareholder returns," he said. "Kroger continues to generate strong and durable free cash flow as reflected by the fact that the company has reduced debt by $1.5 billion over the prior four quarters and continues to increase its dividend to create shareholder value."