Kroger profit beats expectations
Shares of the nation's largest supermarket chain rise on the news.
The company's shares were up 2.6% at $21.59 at 11:46 a.m. ET.
The Cincinnati-based chain reported net income of $261.6 million, or 41 cents a share, an increase of 2.8% from $254.4 million, or 39 cents a year ago. Sales rose 6% to $18.8 billion, compared with $17.7 billion last year. Analysts surveyed by Thomson Reuters were looking for 36 cents a share and $18.7 billion in revenue.
Kroger expects supermarket sales growth, excluding fuel, of 2% to 3% for the year. Net earnings are expected to range from $1.60 to $1.80 per diluted share. Analysts expect $1.74 a share for 2010.
Including retail fuel operations, the company's operating, general and administrative (OG&A) costs were 17% of sales, a decline of 33 basis points from the year-ago period. Excluding retail fuel operations, OG&A increased 7 basis points from the same period last year.
Kroger expects to invest about $2 billion in capital projects in fiscal 2010. In the second quarter, Kroger repurchased 7.3 million shares at an average price of $20.43. At quarter's end, the company said approximately $409.2 million remained under the $500 million stock-repurchase program announced in June.
"As we move into the second half of the fiscal year, we are striving to achieve results in the top half of our earnings guidance range, even as the operating environment remains uncertain," CEO David Dillon said.
Kroger operates 2,468 supermarket and multidepartment stores under two dozen banners, including Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's, Fry's Marketplace, Dillons, QFC and City Market.
"Our customers reward us with their loyalty," Dillon said on the conference call.
"As we head into our prime selling season (Halloween to New Year's), our associates are energized and focused."
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[BRIEFING.COM] Equity indices settled on their lows following a steady, session-long slide. Similar to yesterday, small-caps paced the retreat as the Russell 2000 fell 1.6%, extending its December loss to 3.6%. The S&P 500 settled lower by 1.1%, widening its month-to-date decline to 1.3%.
There was no specific news catalyst behind today's slide, which had the markings of broad-based profit-taking. Seven of ten sectors settled with losses of 1.0% or more while only two groups ... More
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