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Kroger's 1Q profit rises on strong sales gain
June 19th, 2014
CINCINNATI – Kroger Co. saw net earnings climb 4.2% to $501 million in its fiscal 2014 first quarter on a 9.9% jump in sales to $33 billion.
The results exceeded Wall Street’s expectations and extended Kroger’s growth momentum. In its most recent fiscal year, the nation’s largest supermarket chain posted a 13% increase in profits on a 4% rise in sales to $98 billion.
Rodney McMullen, Kroger's chief executive officer, said Thursday that he is pleased with the company’s strong start to its fiscal year. "Kroger associates continue to enhance our connection with all customers and achieve our key performance measures," he said in a statement.
McMullen took the company’s reins on January 1, succeeding 37-year Kroger veteran David Dillon. McMullen has held a variety of positions at Kroger since 1978 and served as chief operating officer and president since 2009.
Kroger’s same-store sales, excluding fuel, rose 4.6% in the three months through May 24 compared with the year-earlier period.
Kroger raised its guidance for the year. It said earnings per share would be $3.19 to $3.27, up from $3.14 to $3.25, suggesting an additional $10 million to $20 million in profit for the year, to $1.6 billion. The company forecast same-store sales growth of between 3% and 4%, up from its earlier estimate of growth in the 2.5% to 3.5% range.
Kroger's first quarter results include sales from the newly added Harris Teeter stores, which Kroger acquired in January for $2.5 billion. The deal added 227 stores in the Southeast and Mid-Atlantic regions and is expected to push Kroger's total annual sales above $100 billion this year, making the Cincinnati-based company one of just 22 U.S. corporations with sales that high.
Kroger operates more than 2,640 supermarkets in 34 states.