Kroger 2Q net earnings, sales up

by Bryan Salvage
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CINCINNATI – The Kroger Co. announced its net earnings for the second quarter ended Aug. 1 totaled $261.6 million, or $0.41 per diluted share. Net earnings in the same period last year were $254.4 million, or $0.39 per diluted share.

Total sales, which include fuel, increased 6.0% to $18.8 billion in the second quarter of fiscal 2010 compared with $17.7 billion for the same period last year. Excluding fuel sales, total sales increased 3.3% in the second quarter over the same period last year. Identical supermarket sales, without fuel, increased 2.7% in the second quarter over the same period last year.

For the first two quarters of fiscal 2010, net earnings were $635.3 million or $0.98 per diluted share. Net earnings for the same period last year were $689.5 million, or $1.05 per diluted share. Total sales were $43.6 billion compared with $40.5 billion for the same period last year. Excluding fuel sales, total sales increased 3.2% over the prior year. For the same period, identical supermarket sales, excluding fuel, increased 2.6%.

"Kroger's sales have remained solid in the face of competitive and economic challenges because of the strong credibility we have with our shoppers,” said David Dillon, chairman and chief executive officer. “Our team understands the importance of finding ways to make each customer visit better than the last one, resulting in consistent positive identical supermarket sales growth.

Kroger confirmed its identical supermarket sales and earnings guidance for fiscal 2010. The company said it continues to expect identical supermarket sales growth, excluding fuel, of 2% to 3% for the year. Net earnings are expected to range from $1.60 to $1.80 per diluted share for the year. Kroger still expects to invest approximately $1.9 to $2.1 billion in capital projects in fiscal 2010.

"As our results show, we are committed to achieving solid financial results today while we invest in the future growth of Kroger's business,” Dillon said. “As we move into the second half of the fiscal year, we are striving to achieve results in the top half of our earnings guidance range, even as the operating environment remains uncertain. Our talented associates are energized and focused on delivering a great experience in our stores for shoppers as we enter the holiday season."

Kroger, the nation's largest traditional grocery retailer, employs more than 334,000 associates who serve customers in 2,468 supermarkets and multi-department stores in 31 states under two-dozen local banner names.
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