Kroger Co. (KR) posted stronger-than-expected second quarter earnings Friday, while boosting its full-year profit forecast, as the country's biggest grocery store chain retained more value-focused shoppers amid a near-record surge in food price inflation.
Kroger said adjusted earnings for the three months ending in July came in at 90 cents per share, up 12.5% from the same period last year and well ahead of the Street consensus forecast of 82 per share. Group sales, Kroger said, were up 9.1% to $34.6 billion and again topped analysts' forecasts of $34.4 billion tally. Same store sales were up 5.8% from last year, firmly ahead of forecasts, while digital channels sales rose 8%.
Looking into the 2023 fiscal year, which ends next February, Kroger said it sees full year earnings in the range of $3.95 to $4.05 per share, a 10 cent improvement from its prior guidance in June.
Same store sales are also likely to rise by a firmer-than-expected rate of between 4% and 4.5%, Kroger estimated.
"Our consistent performance underscores the resiliency and flexibility of our business model, which enables Kroger to thrive in many different operating environments," said CEO Rodney McMullen. "We are applying technology and innovation to improve freshness, grow Our Brands, and create a seamless shopping experience so our customers can get what they want, when and how they want it, with zero compromise on quality, selection and affordability."
"We will continue to focus on providing affordable, fresh food to our customers, investing in wages and the associate experience, and creating zero hunger, zero waste communities because when we do those things well, we deliver attractive and sustainable shareholder returns," he added.
Kroger shares were marked 5.6% higher in mid-day trading following the earnings release to change hands at $51.02each, trimming the stock's six-month decline to around 8%.
