Kroger 3Q sales up, raises FY EPS guidance

CINCINNATI Kroger reported third quarter net sales of $17.6 billion, an increase of 9% over the same period last year. Identical-supermarket sales increased 5.6% without fuel and 7.8% with fuel compared with the same quarter last year.

Net earnings in the third quarter totaled $237.7 million, or 36 cents per diluted share. These results include an after-tax charge of $15.9 million, or 3 cents per diluted share, related to Kroger's $25 million insurance deductible for disruption and damage caused by Hurricane Ike. Excluding this charge from Hurricane Ike, third quarter net earnings were $253.6 million, or 39 cents per diluted share.

Net earnings in the same period last year were $253.8 million, or 37 cents per diluted share.

"Kroger's sales continue to be strong in this tough economy. We know our customers are increasingly feeling pressured in today's environment. Kroger's focus on low prices, quality products and providing a convenient, one-stop solution for their daily needs is resonating with our customers," said David Dillon, Kroger chairman and ceo. "Our associates continue to build customer loyalty through our Customer 1st strategy, which allows us to create a solid return for our shareholders even as the economy presents new challenges."

Kroger confirmed its identical-supermarket sales guidance for fiscal 2008 and said it expects full-year identical supermarket sales growth of 4.5% to 5.5%, excluding fuel.

The company raised its fiscal 2008 earnings per share guidance and said it expects full-year earnings of $1.88 to $1.91 per diluted share, excluding the 3 cents per diluted share charge related to Hurricane Ike.