The Kroger Co. narrowly beat analysts' first-quarter forecasts, but saw sales drop 1% from the same quarter last year.
Sales came in at $37.3 billion in the first quarter, compared to $37.7 billion in 2018. Same-store sales — excluding fuel — rose 1.5%, but that was short of projections.
The company says the drop in first-quarter sales can be attributed to the sale of Kroger's c-store business unit.
"We are building momentum in the second year of Restock Kroger, which is off to a solid start. The entire company is focused on redefining the grocery customer experience, improved upon by exciting partnerships that will create value," says Kroger CEO Rodney McMullen. "We are on track to generate the free cash flow and incremental adjusted FIFO operating profit that we committed to in 2019 as part of Restock Kroger. We are confident in our ability to deliver on our plans for the year and our long-term vision to serve America through food inspiration and uplift."
Profit margins also decreased again due to the company's investments to keep up with Amazon, Walmart and others. Over the last four quarters, the company says it has used cash to invest a combined $589 million in Ocado securities and Home Chef; contribute an incremental $185 million pre-tax to company-sponsored pension plans; repurchase 5 million common shares for $216 million; pay $440 million in dividends, and; invest $3 billion in capital, excluding mergers, acquisitions, and leased facilities.