* Shares up 3.7 percent
By Lisa Baertlein
March 7 U.S. supermarket operator Kroger Co
reported a better-than-expected quarterly profit and said
business remains strong despite higher taxes and gasoline
prices, sending shares to their highest point in more than four
The Cincinnati-based company, which is the biggest U.S.
supermarket operator said sales have been highly variable, but
remain on a strong trend despite consumer anxiety about the
tepid U.S. economic recovery, fluctuating gas prices, higher
payroll taxes and continued uncertainty around federal policies.
"Consumer confidence was fragile throughout the year, but
hit its lowest point this January as customers voiced heightened
concern over taxes," Chief Executive David Dillon said on a
conference call with analysts.
Kroger released its results after a host of restaurants and
retailers - including Olive Garden parent Darden Restaurants Inc
and Wal-Mart Stores Inc - attributed softening
sales to the Jan. 1 payroll tax increase, a sharp rise in gas
prices and delayed federal tax refunds.
Kroger's shares were up 3.7 percent to $30.45 in midday
trading on the New York Stock Exchange. Earlier in the session,
shares hit a high of $30.62, the highest level since August
SWING TO PROFIT
Kroger, operator of chains such as Kroger, Ralphs, Smith's
and Food 4 Less, posted fourth-quarter net earnings of $461.5
million, or 88 cents per share.
Excluding gains from inventory accounting and taxes, the
company earned 77 cents per share, 7 cents better than Wall
Street expected, Kroger said.
In the year-ago quarter, Kroger reported a loss of $306.9
million, or 54 cents per share, after it booked a large charge
related to consolidating its pension plan.
Total sales, including fuel, rose 12.8 percent to $24.2
billion in the latest quarter, largely in-line with analysts'
Kroger said its market-share growth accelerated at year's
end and customers were buying more items during each visit.
Excluding fuel, identical-supermarket sales were up 3
percent, more than the 0.8 percent gain recently reported by
smaller rival Safeway Inc.
Identical-supermarket sales are a measure of a grocer's
performance because they track stores that have remained open
without expansion or relocation for five full quarters.
Kroger - whose rivals also include discounters Wal-Mart and
Target Corp - set its 2013 earnings forecast at $2.71 to
$2.79 per share.