US supermarket chain Kroger said yesterday (13 March) that its fourth quarter profit rose by 36%, driven by sales growth and market share gains, even in areas where it is competing with retail giant Wal-Mart. 

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Kroger’s earnings for the quarter ended 31 December increased to US$384.8m from $282.1m reported in the comparable period last year. Excluding a one-off tax gain of three cents per share, Kroger EPS totaled $0.51 per share. Revenue was up 15% to $16.86bn.


During a conference call to discuss the earnings release, Kroger’s chairman and CEO David Dillon said that gains were notable even in markets where the chain was going head-to-head against retail powerhouse Wal-Mart. Based on internal estimates, the company said that it gained share in 36 of the 44 major markets in which it operates. In the 32 markets where it competes with Wal-Mart, the group grew its share in 26, lost ground in five and remained steady in one.


“Kroger continued to achieve significant growth in market share even in the face of aggressive expansion by [Wal-Mart] Supercenters and other nontraditional formats,” Dillon said. “The pace of our expansion shows no sign of slowing down, and the industry is not getting any less competitive.”


Kroger said that its success was built on a strategy that focused on customer service, product range and selective discounting. “Kroger’s strong fourth quarter results demonstrate once again that our associates understand the importance of offering customers improved service, product quality and selection, and value,” Dillon commented.

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Looking to fiscal 2007, Kroger said that it anticipates earnings of $1.60-$1.65 per share, up 9-12% from last year. Gains, the company said, will be driven by string same-store-sales growth, slightly improved margins and fewer outstanding shares.


The company predicted same-store sales growth of between 3% and 5% for the full year.