Supermarket operator Kroger beat profit estimates. Total operating expenses fell 35 basis points as a percentage of sales compared to last year, the owner of Ralphs, Smith's and Food 4 Less grocery chains said, reports Reuters. "Because retail fuel prices are typically slower to react than their wholesale counterparts, Kroger's fuel margins tend to expand during periods of falling prices," JP Morgan analyst Ken Goldman wrote in a pre-earnings note.
Net income attributable to the company rose to $433 million, or 44 cents per share, in the second quarter ended Aug. 15, from $347 million, or 35 cents per share, a year earlier. Identical supermarket sales, excluding fuel, rose 5.3 percent, beating the 4.7 percent growth expected by analysts polled by research firm Consensus Metrix. Sales rose 0.9 percent to $25.54 billion.
The company now expects earnings of as much as $1.98 a share in the fiscal year, up from a previous forecast of $1.95, notes Bloomberg. Kroger, based in Cincinnati, credited its results to same-store sales growth and efforts to control costs. The company also is expanding its e-commerce operations and adding 20,000 new jobs. The stock climbed as high as $37.75 after the results were posted. The shares had already advanced 10 percent this year through Thursday’s close.