Kroger Sees Signs of Consumer Confidence

ELLIOT ZWIEBACH

CINCINNATI — Kroger Co. here said yesterday a pickup in sales in February indicates a modest strengthening of consumer confidence following the negative impact of a more cautious approach to spending in December and January.

“Through the holidays and immediately following the holidays, the consumer was more cautious, with discretionary general merchandise categories down about 40 basis points,” David B. Dillon, chairman and chief executive officer, said. "But in February we saw a modest improvement, which I would attribute to some regaining of confidence by consumers in how they were approaching spending.”

Dillon made his remarks during a conference call with investors to discuss financial results for the year and fourth quarter that ended Jan. 31. The company saw its stock rise 10% yesterday as the company reported strong results and the market rallied.

For the quarter, net income rose 8.1% to $349.2 million, while sales rose 0.1% to $17.3 billion. Identical-store sales, excluding fuel, increased 3.8% — with grocery, meat, deli/bakery, pharmacy and nutrition beating the average, though those gains were offset by continued slow sales in discretionary general merchandise, Dillon said.

For the year, net income climbed 5.8% to $1.3 billion, with sales rising 8.2% to $76 billion and IDs excluding fuel up 5%.

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