Kroger raises guidance on record quarter

by Monica Watrous
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CINCINNATI — Strong double-digit unit and sales growth in the Kroger Co.’s Simple Truth and Simple Truth Organic lines led the retailer to a record second quarter and its 43rd consecutive quarter of same-store sales growth.

“We are winning with customers because we offer a full range of advantages, including a great overall shopping experience, excellent customer service, a complete assortment of both national and corporate brand products, and everyday low prices and promotional offerings,” said Rodney McMullen, chief executive officer. “As we improve our connection with customers, we are also executing our growth plan and delivering on our key performance indicators, all of which is fueling strong financial results for shareholders.”

For the second quarter, net earnings attributable to Kroger increased to $347 million, equal to 71c per share on the common stock, up 9.5% from $317 million, or 61c per share, in the comparable period.

Sales advanced to $25,310 million, up 12% from $22,686 million the year before.

“We are accelerating core business growth and investing to create unique competitive positioning for today and the future,” Mr. McMullen said. “Based on our strong quarter results, we raised our net earnings per diluted share and identical supermarket sales growth guidance for the year.  We are well on our way to achieving a 13% to 15% net-earnings-per-diluted-share growth rate, including net accretion to earnings from the Harris Teeter merger, plus the dividend for fiscal 2014.”

Kroger now projects adjusted net earnings per diluted share in the range of $3.22 to $3.28, up from a previous guidance of $3.19 to $3.27 per diluted share, and same-store sales growth, excluding fuel, to 3.5% to 4.25%, up from 3% to 4%.
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