Kroger profit rises 10%

The Kroger Co. topped Wall Street expectations with more than one result in the first quarter of fiscal 2016.



The grocery titan reported net earnings of $680 million, up 9.9% from $619 million the prior year period and ahead of Wall Street estimates. Reduced operating expenses helped Kroger produce solid profit growth despite a small decline in gross margin.



Total sales met expectations with 5% growth to $34.6 billion, from $33.1 billion. Same-store sales also beat Wall Street with a 2.4% increase excluding fuel.



Rodney McMullen, chairman and CEO, cited Kroger’s growing omnichannel click and collect program, among other factors, as a catalyst for financial growth.



“We are very pleased with a solid quarter during which we continued to strengthen our connection with customers and expand our ClickList offering to more customers in more markets,” said McMullen. “Fifty consecutive quarters of positive identical supermarket sales growth, excluding fuel, is extraordinary. We've been through all kinds of business cycles during the last 50 quarters, and we've demonstrated time and again that regardless of the environment, you can count on Kroger to continue executing our strategy, investing in growth and creating value for our customers and shareholders."



Looking ahead, Kroger confirmed its net earnings guidance range of $2.19 to $2.28 per diluted share for 2016. Based on current fuel margin trends, the company believes it will be at the low-end to mid-point of this range. Kroger expects fuel margins will be at or slightly below the five-year average.



The company also confirmed its identical supermarket sales growth guidance, excluding fuel, of approximately 2.5% to 3.5% for 2016.