US retailer Kroger has lifted its forecast for annual same-store sales after seeing its half-year revenues increase.
On Friday (9 September), Kroger forecast that its identical supermarket sales, excluding fuel, would climb by 4-5% in its financial year. The company’s previous guidance was for growth of 3.5-4.5%.
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The improved forecast came after Kroger saw its identical supermarket sales accelerate in its second quarter to 13 August. Identical supermarket sales, excluding fuel, were up 5.3%, compared to 4.8% in the first quarter of the year. Total sales, including fuel, increased 11.5% to US$20.9bn.
Net earnings also increased in the second quarter, up from $261.6m to $280.8m. Kroger reported. Diluted earnings per share were $0.46, an increase from $0.41 a year earlier. However, net income benefited from lower tax payments and the retailer said its operating profit fell 1.1% to $488.2m.
Nevertheless, chairman and CEO David Dillon was upbeat about Kroger’s quarterly results. “We are pleased with Kroger’s strong performance this quarter, which we believe is the outcome of our consistent approach to managing the business and executing our Customer 1st strategy,” Dillon insisted. “Our ongoing investments in the four keys – our people, products, prices and the shopping experience – continued to enhance our connection with customers and drive positive identical sales growth.”
Over the first six months of Kroger’s financial year, its sales increased from $43.3bn to $48.3bn. Net earnings rose to $715.1m, up from $635.5m. Net earrnings per diluted share were $1.17, up from $0.98. Operating income increased 6.8% to $1.3bn.
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By GlobalDataThe retailer maintained its forecast for full-year earnings per diluted share to be $1.85-1.95.
“Faced with a sluggish economy, we remain focused on giving better value to our customers,” Dillon said. “We continue making investments that deliver value today and for the future for both customers and shareholders.”
