CINCINNATI — The Kroger Co. shares slumped as the retailer turned in a third-quarter performance that suggests the peak of its pandemic-driven gains has passed. While earnings exceeded investor expectations, revenue fell short, and the company’s sales growth has slowed from the first and second quarters.

Shares of the Kroger Co. trading on the New York Stock Exchange closed at $30.88 on Dec. 3, down $1.41, or 4.4%, from $32.29 the day before.

Net earnings attributable to the Kroger Co. for the third quarter ended Nov. 7 were $631 million, equal to 81¢ per share on the common stock, up sharply from $263 million, or 32¢ per share, in the prior-year period. The company recorded lower operating expenses as a percent of sales in the current quarter.

Sales advanced to $29.72 billion, up 6.3% from $27.97 billion the year before. Excluding fuel and dispositions, sales grew 11.3%, according to the company.

Kroger’s identical sales without fuel increased 10.9% in the quarter, reflecting broad-based growth across all departments, said Gary Millerchip, chief financial officer.

“Meat and produce departments led the way, continuing to underscore the importance of fresh and how we differentiate in quality and assortment for our customers,” he said during a Dec. 3 earnings call.

During the quarter, Kroger expanded to 2,213 pickup locations and 2,468 delivery locations, covering more than 98% of Kroger households. The company’s digital sales grew 108% in the quarter, contributing approximately 4.6% to identical sales without fuel, Mr. Millerchip said.

“At the same time, digital sales growth in the quarter was profitable on an incremental basis, and we continue to improve digital profitability by lowering the cost to fulfill a pickup order and accelerating digital advertising revenue,” Mr. Millerchip said. “We see a clear path to further improve digital profitability by leveraging our personalization tools to increase basket size and improve sales mix, further reduce the cost to fulfill an order via process improvements and automation, and continue to grow digital media revenue.”

Kroger’s store brands grew 8.6% in the third quarter, said William Rodney McMullen, chairman and chief executive officer.

“Private Selection grew over 17%, and Simple Truth grew nearly 15%,” Mr. McMullen said. “These are incredible numbers and demonstrate that while many competitors offer private label products, Kroger’s unique approach to Our Brands is a differentiator in a competitive moat.”

During the quarter, Kroger launched 250 new items under its private label brands, the most ever in a single quarter, Mr. McMullen said. 

“New items for the quarter included launches in trending focus areas such as fresh produce, frozen grocery and expansion of our Simple Truth plant-based collection, unveiling more than 50 new fresh and flavorful plant-based foods at affordable prices,” he said.

Management raised its full-year guidance based on continued strong performance, market share gains and the expectation of sustained trends in at-home food consumption for the remainder of the fiscal year. The company expects total identical sales growth without fuel of 14% and adjusted earnings per share growth of 50% to 53%.

“Our guidance contemplates continued investments in the customer and ongoing COVID-19-related costs to protect the safety of our customers and associates, balanced with continued execution of cost-saving initiatives and growth in alternative profits,” Mr. Millerchip said. “Looking toward 2021, we believe that our performance will be stronger than we would have expected prior to the pandemic when viewed as a two-year stacked result for identical sales without fuel growth and as a compounded growth rate over 2020 and 2021 for adjusted earnings per share growth. We remain confident in our business model and our ability to achieve consistently attractive total shareholder returns.”