Kroger cranked out a 21% increase in profit in the third quarter ending Nov. 8 compared with the same period last year. Net earnings for the quarter were $362 million, and identical store sales were excluding fuel were up 5.6%.
In a call with analysts, CEO Rodney McMullen said this was the 44th quarter with positive identical store sales.
Kroger reported $25 billion in total sales for the third quarter, an 11.2% increase from the same quarter last year. Private label brand performance stayed steady, bringing in 25.8% of sales during the quarter and 27.3% of sales volume.
“Clearly our rebranded opening price point and Kroger banner brands are a hit with customers. Simple Truth and Simple Truth Organic continue to earn double-digit unit and sales growth,” said president and COO Mike Ellis, referring to the company’s natural and organic lines.
Harris Teeter, acquired earlier this year, is performing as expected, according to a company official, who noted that Kroger made price investments at the banner.
Looking toward the future, Kroger predicts that the identical store sales will grow within a range of 5% and 6% next quarter. For the 2015 fiscal year, if fuel prices rise, Kroger is projecting an 8% to 11% increase in profit.
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Ellis called attention to "customer first innovation" at Kroger’s dairy processing plant in Denver, which kicked off milk production in August. The plant, Ellis said, uses new technologies to keep milk fresher, longer, and package “long-shelf-life products.”
“We are the first dairy in the U.S. to deploy robotic technology that enables us to pack cases and pick and palletize orders entirely by automation,” he said.
At the end of the Thursday call with investors, McMullen wished David Dillon well in the future as he steps down as chairman of the board. Dillon led Kroger for 11 years as CEO.
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