(Reuters) - Kroger Co (KR.N), the biggest U.S. supermarket chain, raised its forecast for 2011 earnings, helped by strong sales increases at established stores.
The company now expects earnings for the year of $1.95 to $2.00 a share, up from its previous forecast of $1.85 to $1.95. Analysts on average had forecast $1.96, according to Thomson Reuters I/B/E/S.
Shares of the company, which owns chains that include Ralphs and Food 4 Less, rose 1.1 percent in early trading on Thursday.
Kroger also narrowed its forecast for identical-supermarket sales growth, excluding fuel, to 4.5 to 5 percent for 2011. Its prior call for a rise of 4 percent to 5 percent. Identical-supermarket sales are a closely watched measure of sales at stores open without expansion or relocation for five full quarters.
Kroger’s fiscal third-quarter net income was $195.9 million, or 33 cents per share, compared with $202.2 million, or 32 cents per share, in the year-earlier quarter.
Analysts, on average, were looking for 32 cents a share, according to Thomson Reuters I/B/E/S.
The company booked an inventory-related charge of $61.6 million in the latest quarter, versus $11.5 million in the year-earlier period.
Sales, including fuel, rose 10.3 percent to $20.6 billion. Identical-supermarket sales rose 5 percent, excluding fuel.
The company, which is known for its ability to hold down food prices, also said it expects 2012 earnings-per-share growth of 8 percent to 10 percent.
Kroger’s shares were up 25 cents at $23.43 on the New York Stock Exchange in early trading.
Reporting by Lisa Baertlein in Los Angeles and Brad Dorfman in Chicago; editing by John Wallace and Maureen Bavdek