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Kroger Sales Up, but Taxes Nip Earnings

CINCINNATI — Kroger Co. here on Friday said same-store sales were up 3.6% in the second quarter, excluding fuel, but earnings were down 0.6% vs. a year ago.

Net income for the quarter, which ended Aug. 11, totaled $279.1 million, and was down mainly due to a higher tax rate, Kroger officials said. Sales rose 3.9% to $21.7 billion.

It was the 35th consecutive quarter of positive identical-store sales for Kroger, whose officials in a conference call Friday attributed the success to investments in price and service that drove increases in customer loyalty.

Rodney McMullen, Kroger’s president and chief operating officer, said loyal households grew faster and showed higher identical sales figures than total households during the quarter.

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“Customers continue to visit our stores more frequently, purchase fewer items on each trip and buy more on a monthly basis,” continuing trends over the last several quarters, McMullen said.

Kroger said robust share repurchases and continued sales momentum prompted the company to raise annual earnings guidance to a range of $2.35 to $2.42 per share, up from previous expectations of $2.33 to $2.40. The chain continues to expect annual identical sales growth in the 3% to 3.5% range.

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