No. 1 U.S. supermarket operator Kroger Co. on Thursday reported higher quarterly profit as easing food prices prompted shoppers to increase purchases and raised its full-year earnings forecast.
Lower-than-expected inflation contributed to the highest quarterly increase in unit movement — which Kroger calls tonnage — since the second quarter of 2010.
The Cincinnati-based grocer, which operates the Kroger, Ralphs, Smith's and Food 4 Less chains, recorded net income of $316.5 million, or 60 cents per share, for the third quarter ended Nov. 3, compared with $195.9 million, or 33 cents per share, a year earlier.
Excluding benefits from a settlement with credit card companies and a reduction in its obligation to fund a union pension fund, Kroger earned 46 cents a share in the latest quarter.
Total sales, including fuel, increased 5.9 percent to $21.81 billion, topping the average analyst estimate of $21.65 billion, according to Thomson Reuters I/B/E/S.
Kroger raised its full-year outlook for earnings per share, excluding the two special items, to a range of $2.44 to $2.46. It had forecast $2.35 to $2.42.
Charges also were down in the latest quarter.
Kroger's LIFO (last-in, first-out) inventory accounting charge was $15.5 million in the latest quarter, versus $61.6 million a year earlier, due to easing food inflation.
Operating, general and administrative costs plus rent and depreciation, excluding retail fuel operations and the two adjustment items, declined 21 basis points as a percent of sales.
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