CINCINNATI — Kroger Co. here on Tuesday posted quarterly earnings that exceeded analyst estimates, despite an overall sales decline triggered by a rapid deflation in fuel prices.
For the fiscal first quarter that ended May 23, Kroger posted net income of $435.1 million, or 66 cents per share, on sales of $22.8 billion. Net earnings increased by 12.7% despite a sales decline of 1.3%. The sales decline was due entirely to the retail cost of fuel declining by an average of 41% compared with the same period last year. Excluding fuel, overall sales increased 3.8% and identical-store sales were up by 3.1%.
Analysts were expecting earnings of 61 cents a share, but Kroger said savings on its own costs for fuel and commodities helped create an unexpected tailwind during the quarter. The company, however, maintained its full-year earnings outlook, saying it wasn’t counting on those benefits to continue.
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