Kroger Co. (KR), the largest U.S. grocery-store chain, named Chief Operating Officer W. Rodney McMullen as chief executive officer, replacing David Dillon, who is retiring.
McMullen, 53, will become CEO on Jan. 1 after a long career at the grocer that started as a part-time store worker in 1978, the Cincinnati-based company said today in a statement. The 62-year-old Dillon, who has been with the company for 37 years and served as CEO since 2003, will remain chairman through the end of next year. McMullen’s successor wasn’t named.
The management change comes less than three months after Kroger agreed to buy Harris Teeter Supermarkets Inc. (HTSI) for $2.5 billion to strengthen its presence in the southeast U.S. The transition should “go smoothly” as McMullen has worked closely with Dillon for 10 years, Deborah Weinswig, an analyst for Citigroup Inc., wrote today in a note to clients. Weinswig has a buy rating on the stock.
Kroger, which has more than 2,400 locations, boosted sales by 6.4 percent to $98.7 billion in the year through Aug. 17, according to data compiled by Bloomberg. In June, the chain raised its full-year adjusted profit forecast to as much as $2.80 a share after first-quarter sales increased.
The buyout of Harris Teeter, based in Matthews, North Carolina, will give Kroger a chain that had revenue of $4.54 billion last year and 212 stores in states including North Carolina, Virginia and South Carolina.
Kroger fell 0.6 percent to $40.76 at the close in New York. The shares have advanced 57 percent this year, compared with a gain of 20 percent for the Standard & Poor’s 500 Index.
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