Kroger Company ( KR ) shares are trading higher on Thursday.

The company reported fourth-quarter adjusted earnings per share of $1.14, beating the street view of $1.11. Quarterly sales of $34.308 billion missed the analyst consensus estimate of $34.509 billion.

The LIFO charge for the quarter was $30 million, compared to a LIFO credit of $18 million for the same period last year.

Gross margin was 22.7% of sales for the fourth quarter compared to 22.3% for the same period last year. The improvement in gross margin was primarily attributable to the sale of Kroger Specialty Pharmacy and lower shrink, partially offset by lower pharmacy margins and the LIFO charge.

The FIFO gross margin rate, excluding rent, depreciation and amortization, fuel, and the 53rd week in 2023, increased 54 basis points compared to the same period last year.

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The improvement in rate was primarily attributable to the sale of Kroger Specialty Pharmacy and lower shrink, partially offset by lower pharmacy margins.

Kroger’s net total debt to adjusted EBITDA ratio is 1.79, compared to 1.33 a year ago, excluding the 53rd week in 2023.

“Kroger is operating from a position of strength, delivering fourth quarter results that came in ahead of expectations due to the strength of our model and the disciplined execution of our teams,” said Chairman and interim CEO Ron Sargent.

Earlier this month, the company announced the resignation of CEO Rodney McMullen.

McMullen resigned from Kroger ( KR ) following an investigation of personal conduct by the board. Kroger ( KR ) said it was made aware of a certain personal conduct on Feb. 21, which was immediately investigated.

The company’s board found that McMullen’s conduct was inconsistent with Kroger’s policy on business ethics.

Outlook: Kroger ( KR ) sees FY25 adjusted EPS of $4.60 – $4.80 versus $4.79 estimate. Company projects FY25 identical sales growth without fuel of 2.0% – 3.0%.

Price Action: KR shares are trading higher by 2.49% to $64.09 at last check Thursday.

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