By Tess Stynes
Kroger Co. said its earnings rose 23% on stronger-than-expected
sales, and that it also benefited from stronger fuel margins during
the January quarter.
Shares rose 4.3% to $72.61 in recent premarket trading as the
largest grocery chain in the U.S. also issued strong guidance for
the year ending in January 2016.
Kroger expects per-share earnings of $3.80 to $3.90, above
estimates of analysts polled by Thomson Reuters for per-share
profit of $3.72.
Kroger also projected identical supermarket sales growth,
excluding fuel, of roughly 3% to 4%, citing expectations for lower
inflation during the year.
Cincinnati-based Kroger has been taking a bigger share of the
food-retail market, which has expanded in recent years to encompass
everything from Wal-Mart Stores Inc. to dollar stores. Kroger has
turned in stronger performances than other supermarket chains,
partly because it cut prices ahead of the recession and expanded
its store-brand products faster than most rivals.
Kroger also has been buoyed by its acquisition of higher-end
supermarket chain Harris Teeter its late January 2014. Another
acquisition Kroger made last year, Vitacost.com, provided access to
online ordering and delivery, an area of increasing importance
delivery, an area of increasing importance for grocery chains amid
burgeoning competition from companies like Amazon.com Inc. and
FreshDirect.
For the period ended Jan. 31, Kroger reported a profit of $518
million, or $1.04 a share, up from $422 million, or 81 cents a
share, a year earlier. Revenue increased 8.5% to $25.2 billion.
Analysts polled by Thomson Reuters expected per-share profit of
90 cents and revenue of $25.13 billion.
Sales at locations open at least 15 months, excluding fuel, rose
6%.
Write to Tess Stynes at tess.stynes@wsj.com
Access Investor Kit for Amazon.com, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0231351067
Access Investor Kit for The Kroger Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US5010441013
Access Investor Kit for Wal-Mart Stores, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9311421039
Subscribe to WSJ: http://online.wsj.com?mod=djnwires