Kroger, the US grocer, today (16 September) praised a “strong” second quarter as half-year sales and earnings rose.
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Net earnings for the first half of 2008 were up 9.7% to US$662.5m, with sales rising 11.7% to $41.2bn. Identical supermarket sales, excluding fuel, rose 5.3%.
Chairman and CEO David Dillon described Kroger’s second-quarter results as “strong”, although profit growth slowed. The company booked net earnings of $276.5m, up 3.4% on the year. Revenue climbed 11.9% to $18.1bn; identical supermarket sales excluding fuel rose 4.7%.
“Our year-to-date performance demonstrates Kroger’s ability to deliver sustainable results today while we continue to invest for the future,” Dillon said. “We know market conditions will continue to be a challenge and we believe our strategy works well in good times and bad. Kroger’s team and our overall strategy clearly stand out in the current environment.”
However, the impact of Hurricane Ike on the company’s operations remains unclear. Kroger issued an improved forecast for full-year sales, indicating that it expects identical sales to rise by 4.5-5.5%, excluding fuel, this year. The company also confirmed its earnings target for the year of growth of 9-12% in earnings per share.
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By GlobalDataNevertheless, Dillon admitted the full impact of Ike was hitherto unknown could and affect the company’s guidance. “The company’s expectations for the second half of 2008 exclude any impact from Hurricane Ike. The hurricane and its remnants affected Kroger operations in Texas and several inland states, particularly Indiana, Kentucky and Ohio,” Dillon said.
However, he added: “The financial impact of the hurricane will not be significant enough to cause Kroger to alter its strategy.”
