Shares in Kroger jumped after the supermarket chain reported better-than-expected third quarter earnings, driven by improved sales.
Kroger said total sales increased 4.5 percent in the quarter, pushing its fiscal third-quarter earnings to $397 million, better than the $391 million for the same quarter last year.
And sales in supermarkets open at least 15 months rose 1.1 percent, excluding fuel sales. The metric — a key measure of a retailer’s health — strips out the impact of stores that have recently opened or closed. Kroger expects identical-supermarket sales growth excluding fuel to exceed 1.1 percent in the fourth quarter.
The results represent a mini-rebound for the company, which has seen profits suffer as it slashed prices to compete with Walmart and Target — as well as Amazon since its acquisition of Whole Foods — in an increasingly competitive landscape for grocers.
The Cincinnati-based company said it had profit of 44 cents per share, beating Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 40 cents per share. Kroger posted earnings of 41 cents per share in last year’s third quarter.
Rodney McMullen, Kroger’s chairman and CEO, said Restock Kroger is off to a great start.
“Customers are recognizing our efforts to redefine the customer experience and rewarding us with their loyalty,” McMullen said. “We continue to accelerate our digital and ecommerce offerings, to grow Our Brands, to lower prices for customers, and to invest in our associates.”
McMullen said Kroger had its best ever Black Friday results for general merchandise, led by record sales at Fred Meyer, and that “everything we are doing revolves around our associates providing friendly service and fresh products to our customers.”
“This quarter shows that by investing for the future, our business continues to improve and gain momentum,” he said. “We remain confident in our ability to continue to grow identical supermarket store sales and market share for the balance of the year and in 2018.”
Kroger still expects full-year adjusted earnings in the range of $2 to $2.05 per share. Analysts surveyed by FactSet forecast $1.97 per share, on average.
The operator of Fred Meyer, Ralphs and Fry’s posted revenue of $27.74 billion in the period, also topping Street forecasts. Four analysts surveyed by Zacks expected $27.31 billion. The company had revenue of $26.56 billion in last year’s third quarter.
Shares in Kroger Co. rose more than 8 percent in morning trading, but are still down about 17 percent in the past year.
Staff Writer Eric Schwartzberg contributed to this report.