CINCINNATI -- Kroger Co. here said accelerated store construction, productivity and technology improvements, coupled with cost reductions in procurement and distribution, boosted sales and earnings for the third quarter and 39 weeks ended Oct. 7.
For the quarter, the company saw earnings increase 69.8% to $61.2 million on sales of $6.96 billion, a 4.6% increase. Operating cash flow rose 8.8% to $299 million.
For the year to date, earnings rose 30.9% to $197.3 million on sales of $18.1 billion, a 4.1% rise. Operating cash flow increased 9.6% to $847.9 million.
Kroger recorded a third-quarter charge of $1.5 million for the early retirement of debt.
Joseph A. Pichler, chairman and chief executive officer, said an aggressive expansion program, improved technology, distribution and productivity, plus the conversion of $200 million in convertible junior subordinated notes to 107 million shares of common stock, helped reduce debt by $437 million while increasing capital expenditures vs. 1994.
"In 1993 we established a strategy for growth from existing assets, new stores and improvements in the fundamentals -- technology, distribution and productivity enhancements," he said in a statement.
"By adhering to this strategy, Kroger is achieving consistently stronger results."
Pichler also said the company's private-label program "continue[s] to make a solid contribution to sales and profits."
During the quarter, the company opened or expanded 18 stores, for a total of 48 for the year to date. The company said this was "on target" with its plan of expanding retail square footage by 5% to 6% per year in 1994 through 1996.
