J-W Wire Reports
Kroger Co., the nation's largest supermarket chain, said Tuesday that earnings per share rose in the second quarter, matching analysts' projections before costs associated with the merger of archrival Fred Meyer Inc. earlier this year.
Kroger, the parent of Hutchinson-based Dillon Stores, also said the merger was going smoothly and that it expected to meet analysts' earnings forecasts for the full year. Analysts polled by First Call/Thomson Financial expect Kroger to earn $1.15 per share in the fiscal year ending in February 2000.
Kroger shares ended 1 1/16 higher at 24 5/8 in New York Stock Exchange trading Tuesday.
The Cincinnati-based chain said it earned $336 million, or 24 cents a fully-diluted share in the quarter ended Aug. 14, before the merger costs and an extraordinary item.
The results were about 26 percent over the companies' estimated combined earnings of 19 cents in the same quarter a year ago, before an extraordinary item.
Gary Rhodes, a spokesman for Kroger, said year-to-year comparisons were difficult because of the merger and other items, but said 19 cents was the "best estimate."
Kroger said the prior-year estimate includes actual Fred Meyer results before merger costs and an estimate of Kroger's pre-merger results, excluding one-time expenses, to reflect the change to a new fiscal calendar year.
Including pre-tax merger costs of $230 million, or $146.6 million after tax, Kroger earned 6 cents before an extraordinary charge equal to 1 cent from the early retirement of debt.
Sales for the quarter rose 6.2 percent to $10.3 billion from $9.9 billion, as adjusted. Identical food-store sales grew 2.6 percent. It said comparable-store sales, which include relocations and expansions, rose 3.6 percent in the quarter.
"Our strong sales momentum was generated by new merchandising programs, the introduction of more than 100 new private-label products and another fine performance from our manufacturing operations," said Joseph Pichler, Kroger's chairman and chief executive officer.
Kroger operates more than 2,000 grocery stores and nearly 1,000 convenience stores.
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