Kroger Co. turned in solid revenue and same-store sales gains and beat financial analysts' earnings projections for its fiscal 2010 first quarter.

"We continue to build momentum and grow market share as we invest in our asset base and cost-saving projects," chairman and chief executive officer David Dillon commented.

CINCINNATI — Kroger Co. turned in solid sales gains and bested financial analysts’ earnings projections for its fiscal 2010 first quarter.

Kroger Co. turned in solid sales gains and bested financial analysts’ earnings projections for its fiscal 2010 first quarter.

The nation’s biggest supermarket operator said Thursday that total sales rose 8.7% to $24.8 billion in the quarter ended May 22, compared with $22.8 billion in the prior-year period.

Excluding fuel sales, overall revenue in the first quarter gained 3.1% year over year. Identical supermarket sales, without fuel business, climbed 2.4% in the first quarter versus a year ago, Kroger reported.

Meanwhile, net earnings for the fiscal 2010 first quarter came in at $373.7 million, or 58 cents per diluted share, down from $435.1 million, or 66 cents per diluted share, a year earlier.

However, Kroger beat analysts’ average earnings estimate of 54 cents per share and finished in the upper end of their forecast, which ranged from 43 cents to 59 cents per share, according to Thomson Financial.

Kroger noted that it recorded a $15.4 million LIFO charge during the 2010 first quarter, representing a decrease of $7.7 million from the same period last year. Excluding retail fuel operations, the LIFO charge declined 4 basis points as a percentage of sales.

"I am pleased with the strong, positive identical sales growth we achieved in the first quarter while striking a better balance on margin investments," Kroger chairman and chief executive officer David Dillon said in a statement.

"Our Customer 1st strategy continues to deliver results through improvements in all four key areas we target: our people, our products, the overall shopping experience in our stores and prices," Dillon commented. "As a result, the total number of families we serve continues to grow, and our most loyal customers are buying more with us."

Kroger confirmed its identical supermarket sales and earnings guidance for fiscal 2010. The company said it continues to expect identical supermarket sales growth, excluding fuel business, of 2% to 3% for the year. Net income is projected at $1.60 to $1.80 per diluted share for the year, compared with earnings of $1.71 per share in the prior fiscal year.

Analysts’ average estimate for Kroger’s fiscal 2010 earnings is $1.74 per share, ranging from a low of $1.62 to a high of $1.83, Thomson Financial reported.

"Throughout the difficult operating environment, the Kroger team has stayed squarely focused on delivering on our Customer 1st strategy," Dillon stated. "We continue to build momentum and grow market share as we invest in our asset base and cost-saving projects. As a result, we are generating free cash flow that strengthens our financial position and rewards shareholders through dividends and share repurchases."

Kroger operates 2,470 supermarkets and multidepartment stores in 31 states under two dozen local banners, including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs and Smith’s. The company also operates 779 convenience stores, 375 fine jewelry stores, 909 supermarket fuel centers and 40 food processing plants in the United States.