Tags: US | Earns | Kroger

Grocer Kroger Turns Profit as Revenue Rises

Thursday, 02 Dec 2010 11:47 AM

Kroger Co. rang up better sales and returned to third-quarter profitability, as a focus on building customer loyalty in a rough economy paid off for the nation's largest traditional grocery chain.

The Cincinnati-based grocer reported Thursday that net income was $202.2 million, or 32 cents a share, on revenue of $18.7 billion, a 5.9 percent increase over sales a year ago.

Analysts expected earnings of 32 cents a share and revenue of $18.5 billion for the quarter that ended Nov. 6.

In last year's third quarter, Kroger reported a loss of $875 million, or $1.35 a share, including a charge of $1.05 billion reflecting the declining value of its Ralphs division in recession-pounded California. Without that charge, Kroger would have earned $176.7 million, or 27 cents a share. This year's quarterly net income was 14 percent higher than that adjusted figure.

Kroger shares tumbled in premarket trading from the 52-week high of $24.14 where they closed Wednesday. Shares fell $2.21, or 9 percent, early Thursday and have traded as low as $19.08 the past year.

Kroger operates 2,461 grocery stores in 31 states under some two dozen local banner including Ralphs, Fred Meyer, Food 4 Less, King Soopers, Dillons, Smith's and Fry's.

The company narrowed its full-year guidance, dropping the high end and raising the low — to a range of $1.65 to $1.78 per share from $1.60 to $1.80 per share. Analysts surveyed by Thomson Reuters expect, on average, that the company will earn $1.78 per share for the year on sales of $81.35 billion.

The company also tightened its forecast for annual revenue from stores open at least 15 months, a key retail gauge because it excludes stores that open or close during the period. The forecast went a 2 percent to 3 percent projected rise to 2.5 percent to 3 percent.

For the third quarter, Kroger said sales at stores open at least 15 months rose 2.4 percent, excluding fuel sales. Last year, they were up 1.3 percent. Without fuel, sales rose 3.1 percent for the quarter.

Kroger says repeat customers are key to its long-term growth, and it has lured customers with expanded fuel rewards, promotions such as $5 rebates for buying certain items in "mega" sales, more online coupons and mailings of special coupons for items individual households frequently buy.

Discounting amid tough grocery competition continued to bite into Kroger margins, but the company said cost-cutting and productivity increases helped compensate.

"These results show Kroger's strategy is working and that our core grocery business is strong and resilient," David B. Dillon, Kroger's chairman and CEO, said in a statement.

Kroger is drawing customers with lower prices and a pleasant shopping experience, Dillon said.

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 
1Like our page
2Share
Companies
Kroger Co. rang up better sales and returned to third-quarter profitability, as a focus on building customer loyalty in a rough economy paid off for the nation's largest traditional grocery chain. The Cincinnati-based grocer reported Thursday that net income was $202.2...
US,Earns,Kroger
447
2010-47-02
Thursday, 02 Dec 2010 11:47 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved