Kroger delivers on customer strategy with strong Q1

CINCINNATI — Fuel sales at Kroger helped drive the company's total sales up 5.8% to $29.1 billion in the first quarter of fiscal 2012 from $27.5 billion for the same period last year. Total sales, excluding fuel, increased 4.3% over the same period last year.



Identical supermarket sales, without fuel, increased 4.2% in the first quarter over the same period last year, marking the 34 consecutive quarters of positive identical supermarket sales for Kroger.



Net earnings for the first quarter totaled $439.4 million, or 78 cents per diluted share. Net earnings in the same period last year were $432.3 million, or 70 cents per diluted share.



Separately, the company announced that the board of directors authorized a new $1 billion share repurchase program that replaces the prior authorization, which was exhausted on June 12, 2012.



"Kroger's solid first quarter performance demonstrates that our Customer 1st strategy continues to resonate with customers," said David B. Dillon, Kroger's chairman and chief executive officer. "Our core business is growing, and we are rewarding shareholders through earnings growth, increasing dividends over time and share buybacks."



In light of its first quarter results, Kroger has raised its full year, earnings per share guidance to $2.33 to $2.40 per diluted share for fiscal 2012. The original guidance was $2.28 to $2.38 per diluted share.



Kroger continues to expect identical supermarket sales growth, excluding fuel, of 3% to 3.5%. In accordance with original guidance, this includes the expected negative effect on sales from prescription drugs coming off patent.



"We were very pleased with the results of the first quarter. We exceeded our expectations, and as a result raised our earnings per share guidance for the year," Dillon said. "Through our focus on the customer, we will continue to stand out among food retailers, and drive loyalty, cash flow and earnings growth in 2012 and beyond."