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Kroger beats net profit expectations for Q4, matches EPS for FY'17

Kroger Co. reported net profit for its fiscal fourth quarter on March 8 that beat analyst expectations, while adjusted EPS for the year was in line with the grocer's guidance.

Net earnings excluding adjustment items for the quarter ended Feb. 3 totaled $562 million, above the $506 million that the company reported for the year-ago period. The S&P Capital IQ estimate for net income excluding expenditures was $558.3 million.

The fourth quarter included an extra week compared to the company's 2016 fiscal year, the company noted in a statement summarizing its results. Excluding the effect of the extra week, net earnings totaled $483 million.

Net earnings per share including adjustment items totaled 63 cents, or 54 cents excluding the impact of the extra week. The S&P Capital IQ mean consensus estimate for normalized EPS was 63 cents.

The company recorded a tax benefit of $922 million during the quarter. The company said the total included the effect of deferred tax liabilities and a change in the tax rate in the final weeks of the 2017 fiscal year. President Donald Trump signed the Tax Cuts and Jobs Act into law in December 2017.

Kroger said it would utilize the tax benefit from the tax legislation to "accelerate investments" in Restock Kroger, a digital expansion plan the company announced in October 2017.

Identical supermarket sales excluding revenue from fuel rose 1.5% during the quarter, up from a decline of 0.7% during the year-ago period. Total sales for the quarter were $31.03 billion, higher than the $27.61 billion the company reported for the same quarter in its 2016 fiscal year.

For its 2018 fiscal year, Kroger expects net earnings per diluted share of between $1.95 and $2.15.

Kroger also reported results for its full 2017 fiscal year. Adjusted net earnings per share for the year totaled $2.04, on the high end of the guidance range between $2.00 and $2.05 per share the company confirmed in November 2017. The S&P Capital IQ mean consensus estimate for normalized EPS is $2.04.

Excluding the impact of the extra week, EPS for the year totaled $1.95.