Inventory Charge Slows Profit Growth for Kroger

CINCINNATI — Kroger here reported net earnings of $322.9 million on sales of $17.2 billion during the fiscal fourth quarter that ended Feb. 2. Net earnings were down by 16% compared with the fourth quarter a year ago, which included an extra week. Earnings per share of 48 cents were a penny more than analyst estimates. Kroger took a $54 million charge for excess inventory, a larger bite than it had anticipated, as inflation increased by an estimated 3.8% during the quarter. Those changes were largely offset by sales increases, officials noted. Adjusted for the extra week, identical-store sales increased 8.2% including fuel and 5.3% excluding fuel. For the fiscal year, sales of $70.2 billion increased 6.2%, with identical-store sales excluding fuel rising by 5.3%. Earnings of $1.18 billion, or $1.69 a share, grew 15% when adjusted for the extra week in fiscal 2006.

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