What is in this article?:
- Kroger Boosts Profit Outlook After Q3 Growth
- Gaining Market Share
Regarding the fiscal cliff: "We think we are in a great position in any of the possible outcomes we can imagine.”
— David Dillon, chairman and CEO, Kroger
Gaining Market Share
The company also said it recorded its highest increase in tonnage sales in more than two years, which it said was an indication that it continued to gain market share.
Total sales in the quarter, including fuel, increased 5.9% over year-ago levels, to $21.8 billion. Identical supermarket sales, excluding fuel, grew 3.2%. Kroger said the rate of product-cost inflation “continued to flatten” in the quarter, to about 1.4% excluding fuel. Inflation hit every department except seafood and produce, which both had deflation.
Kroger raised its diluted earnings per share guidance, excluding the two adjustment items in the fourth quarter, to $2.44 to $2.46 for the full year, up from the previous guidance range of $2.35 to $2.42.
In the fourth quarter, the company expects ex-fuel ID sales growth of 3% to 3.5%.
Scott Mushkin, an analyst with Jefferies & Co., New York, said that while profits exceeded forecasts, EBIT margins were pressured in the third quarter.
“Our expectation is that the EBIT margin will improve slowly over the next 12-18 months as Kroger leverages some of the significant share gains it is seeing,” he said.
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