Walmart rival extends winning streak
Unfazed by Walmart’s resurgent customer traffic and same-store sales rebound, the nation’s second largest grocer this week hung its 34 consecutive quarter of identical-store sales growth on the board.
Kroger said identical-store sales, defined as stores in operation for five full quarters without expansion or relocation, increased 4.2% during the first quarter ended May 19, exceeding the company’s full year guidance range, which called for an increase of 3% to 3.5%. Kroger’s total sales increase 5.8% to $29.1 billion. Net earnings for the first quarter totaled $439.4 million, or 78 cents per diluted share compared with net earnings in the same period last year of $432.3 million, or 70 cents per diluted share.
The gains come as Walmart has regained customer traffic by adding back 10,000 items to stores and also grown more aggressive in touting its price leadership and ad match programs. A national ad campaign that began airing last month features the surprising quality of Walmart beef. Nevertheless, Kroger keeps piling on the comps.
"Our core business is growing, and we are rewarding shareholders through earnings growth, increasing dividends over time and share buybacks,” said chairman and CEO Dave Dillon.
On the day of the earnings release, Kroger’s board authorized a new $1 billion share repurchase program that replaced a prior authorization that was exhausted on June 12.
“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."
Kroger expects to earn $2.33 to $2.40 per diluted share for fiscal 2012 compared with earlier guidance of $2.28 to $2.38 per diluted share.
Kroger operates 2,425 supermarkets and multi-department stores under two dozen different banners in 31 states.