Kroger Hikes Guidance After 1Q EPS Beat, Slight Sales Miss

By Matt Egan Earnings FOXBusiness

Michael Lipsitz does his grocery shopping at the WalMart in Crossville, Tennessee March 21, 2008. Food prices are soaring, a wealthier Asia is demanding better food and farmers can?t keep up. In short, the world is in a food crisis that is in ... danger of boiling over. REUTERS/Brian Snyder (UNITED STATES) (Reuters)

Kroger (KR) beat the Street on Thursday with a 9% bump in fiscal first-quarter profits, although the grocery chain’s sales narrowly trailed expectations.

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In addition to posting stronger-than-expected profits, Kroger raised its full-year earnings guidance.

The company said it earned $481 million, or 92 cents a share, last quarter, compared with a profit of $439 million, or 78 cents a share, a year earlier. Analysts had been calling for EPS of 88 cents.

Revenue rose 3.4% to $30 billion, which is slightly below the Street’s view of $30.2 billion. Excluding fuel, sales were up 3.8%.

“Kroger achieved strong sales and record earnings per share for the quarter, and our customers' positive view of us continues to improve," CEO David Dillon said in a statement.

In a sign of confidence, Kroger upgraded its full-year EPS outlook to a range of $2.73 to $2.80, up from $2.71 to $2.79 previously. That new guidance compares with the Street’s view of $2.77 per share.

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Management sees identical supermarket sales growth of about 2.5% to 3.5% for fiscal 2013, excluding fuel. Looking further ahead, Kroger projected long-term growth guidance of 8% to 11%.

Shares of Cincinnati-based Kroger gained 0.77% to $35.13 in premarket trading, solidly outperforming a 1% decline on the S&P 500 futures. The rally should allow Kroger to build on its impressive 2013 advance of 35%.

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