Kroger Q1 Profit Tops Expectations

reported better-than-expected earnings for the first quarter, but the company's sales missed analysts' estimates. The Cincinnati, Ohio-based company reported quarterly net earnings of $619 million, or $1.25 per share, compared to $501 million, or $0.98 per share, in the year-ago quarter. Kroger's adjusted earnings in the year-ago quarter were $557 million, or $1.09 per share. Its total sales rose 0.3 percent to $33.1 billion from $33.0 billion, while sales, excluding fuel, climbed 6.4 percent in the first quarter. Analysts were expecting earnings of $1.22 per share on revenue of $33.34 billion. The company recorded a $28 million LIFO charge in the quarter. The average estimate among 23 Estimize users was for earnings of $1.22 per share and revenue of $33.28 billion. Its identical supermarket sales growth, without fuel, rose 5.7 percent in the quarter. During the first quarter, the company repurchased 8.0 million common shares for a total of $585 million. Chairman and CEO Rodney McMullen said, "We are managing through a volatile operating environment, with fuel margins normalizing compared to last year's record highs, inflation in some commodities and deflation in others. Our results show the power of our Customer 1st Strategy. Our associates are making a difference for our customers by providing excellent service and product quality and selection, and we continue to improve the shopping experience by bringing technology and digital capabilities to our business." The company confirmed its earnings forecast of $3.80 to $3.90 per share for fiscal 2015. Kroger now expects FY15 identical supermarket sales, excluding fuel, of 3.5 percent to 4.5 percent, versus original outlook of 3.0 percent to 4.0 percent growth. Kroger shares gained 1.51 percent to $74.01 in pre-market trading.