CINCINNATI — The Kroger Co.’s Simple Truth and Simple Truth Organic private label brands continue to grow at what the company considers “an astonishing pace.” The product lines, which debuted in 2012 and achieved $1.2 billion in sales last year, set a record high for total sales in the recent quarter, said Mike Schlotman, executive vice-president and chief financial officer.
For the third quarter ended Nov. 7, Kroger earned $428 million, or 44c per share on the common stock, up from $362 million, or 37c per share, for the prior-year period. As a result of lower fuel prices, sales increased 0.4% to $25,075 million, up from year-ago sales of $24,987 million. Excluding fuel, total sales advanced 5.5%, the company said.
Identical supermarket sales, excluding fuel, rose 5.4% in the quarter over the year-ago period, marking the company’s 48th consecutive quarter of positive growth.
“Corporate brands performance during the third quarter was strong, representing approximately 27.7% of total units sold and 25.9% of sales dollars, excluding fuel and pharmacy,” Mr. Schlotman said during a Dec. 3 earnings call with financial analysts.
Kroger’s latest brand, which debuted in October, is off to a great start, he added. Billed as a “journey of epicurean proportions,” HemisFares’ initial launch included more than two dozen products imported from Italy, such as dry pasta, jarred sauces and gelato. The company said it plans to add more products from regions in Spain, Japan and other countries over the next year.
“Our newest brand, HemisFares, has been embraced by foodie customers, so much so that we are currently working with our Sicilian gelato supplier to expand capacity while maintaining the best in the world quality of the product,” Mr. Schlotman said.Based on strong year-to-date performance, the company has raised its net earnings per diluted share guidance to a range of $2.02 to $2.04, up from a previous target of $1.92 to $1.98 per diluted share, which exceeds the company’s long-term growth rate guidance of 8% to 11%. Kroger expects identical supermarket sales growth, excluding fuel, of approximately 5% to 5.25% for the full year.