Kroger says its net revenue totaled $33.6 billion for the third quarter ending November 9, slightly down from $34 billion during the same period last year. The gross margin for the quarter was 22.9 per cent. 

The mild decline was due to Kroger Specialty Pharmacy’s sale (KSP) and lower fuel profits. However, excluding fuel and KSP,  its sales increased by 2.7 per cent compared to the previous year.

Chairman and CEO Rodney McMullen said that while the macroeconomic environment remains uncertain, the company is confident it can deliver value for its customers and shareholders.

“We continued to grow total households this quarter by delivering exceptional value for customers, with low prices, personalized offers, and great quality Our Brands products,” he added.

Excluding fuel, the FIFO (first in, first out) gross margin rate increased by 51 basis points, which the company said reflected improved margins driven by the sale of KSP, better performance from private-label products, and lower shrinkage. 

The sale of KSP in October for $464 million reduced quarterly sales by approximately $340 million compared to last year but had no material impact on operating profit.

Kroger said it had paused its share repurchase program to prioritize debt reduction following its proposed merger with Albertsons. 

Commenting on the merger, Mullen said the company remains confident in its position in the market.

“The food industry has always been competitive and will continue after this merger,” he added. 

“We are committed to closing this merger because bringing Kroger and Albertsons together will provide meaningful and measurable benefits – lower prices, secure jobs, and expanded access to fresh, affordable food – for customers, associates, and communities across the country.”