Kroger’s net income soared 23.2 per cent to $2.67 billion despite its revenue declining 1.9 per cent to $147.12 billion last year.

The results include $2 billion of Kroger Specialty Pharmacy sales, significantly lower than the $150 billion sales of the prior year, reflecting the sale of that business.

However, Kroger’s gross margin improved to 22.3 per cent, primarily attributable to the sale of Kroger Specialty Pharmacy, the performance of its own brands, and lower shrink.

During the year, the company increased associate wages, resulting in an average hourly wage of more than $19 and more than $25 with comprehensive benefits factored in.

“Investments made to diversify our business have added more ways for Kroger to drive sustainable future growth,” said Todd Foley, Kroger interim CFO.

“With our strengthened balance sheet, we plan to continue to invest in our business through new store growth, grow our dividend subject to board approval, and return excess cash to our shareholders through share repurchases to drive shareholder returns in 2025, consistent with our long-term growth expectations.”

Meanwhile, former Kroger CEO Rodney McMullen has to forfeit $11.2 million in unvested stock and options following his sudden resignation this week, which followed the board’s becoming aware of a breach of personal conduct. The supermarket and department store operator did not elaborate on the nature of the behavior, but said it was “not related to the company’s financial performance, operations or reporting, and it did not involve any Kroger associates”.

As of the resignation date, McMullen will retain any equity awards that are fully vested equity awards for which the performance period is complete.

The company has already engaged a firm to assist in the search for a new CEO.