CINCINNATI — Kroger Co. here said net income for its fiscal first quarter, which ended May 24, rose 14.7% to $386 million, with per-share earnings hitting a record of 58 cents, compared with 47 cents a year ago. Sales climbed 11.5% to $23.1 billion, and identical-supermarket sales, excluding fuel, rose 5.8%. Kroger said it was raising its financial guidance for earnings and identical sales growth for the year. It now projects earnings gains of 9% to 12% over the $1.69 per share in the prior fiscal year — raising the low end of its earnings guidance by 2 cents, to $1.85 per share from $1.83, while maintaining the high end at $1.90. Kroger said the increase will be driven by strong identical-store sales; a slight improvement in non-fuel operating margin; and fewer shares outstanding. It also said identical sales gains will increase in the range of 4% to 5.5%, excluding fuel, compared with earlier projections of 3% to 5%. During a conference call with analysts yesterday, David Dillon, chairman and chief executive officer, characterized the rate of inflation — 3.5% at Kroger — as moderate, “[though] if you read the press, you would think inflation in food products was off the chart,” he said. "One reason for that [perception] is, we've had a 20-year period where we've had basically no inflation, zero — some items half a point up or down — but really zero. But now that we've had a year or two of low-level moderate inflation, people are writing a lot about it.”

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