Kroger (KR) reported better-than-expected second-quarter earnings and higher sales on Friday, leading the No. 1 U.S. supermarket operator to lift its full-year guidance.
The Cincinnati-based operator of Ralphs, Fred Meyer, Smith's, Food 4 Less and other stores reported net earnings of $279.1 million, or 51 cents a share, compared with a year-earlier $280.8 million, or 46 cents.
That topped average analyst estimates in a Thomson Reuters poll by two cents.
Revenue for the three-month period was up 3.9% to $21.7 billion from $20.9 billion a year ago, narrowly below the Street’s view of $21.9 billion.
"We are pleased with Kroger's strong performance in the second quarter," Kroger CEO David Dillon said in a statement. "Increased customer loyalty and solid cost controls allowed us to grow sales, profitability, and shareholder value."
The improvement led the company to lift its fiscal 2012 outlook to a range of $2.35 to $2.42 a share from its earlier view of $2.33 to $2.40 a share. Analysts on average are looking for earnings of $2.37.
Kroger, whose loyalty programs helped buoy sales even as food costs rose, said identical-supermarket sales – a closely-watched growth metric that measures sales at stores open longer than a year – rose 3.6% during the period, marking the 35th consecutive quarterly increase.
The company continues to expect identical-store sales growth of 3% to 3.5% for the full year.
Shares of Kroger slipped about 2.3% early Friday to $22.50.