CINCINNATI – Kroger’s net income fell nearly 6 per cent during the third quarter, partly on the costs from the pending acquisition of Harris Teeter.
Kroger and other supermarkets are trying to adapt to a shifting industry as shoppers increasingly buy groceries at big-box retailers, drugstores and dollar stores with growing food sections.
The company is bolstering its appeal across a broader spectrum, through its acquisition of upscale food retailer Harris Teeter, and an expanded loyalty program for customers sticking to a tighter budget.
The nation’s largest traditional supermarket said Thursday that its net income fell to $299 million, or 57 cents per share. That compares with net income of $317 million, or 60 cents per share a year ago. Excluding costs related to the acquisition and a tax benefit, net income totalled 53 cents per share, matching expectations. A year ago, the company benefited from a settlement with credit card companies. Excluding that and other items, year-ago revenue totalled 46 cents per share.
Revenue rose 3 per cent to $22.51 billion from $21.81 billion. Analysts expected $22.72 billion.
Kroger Co., which owns also Ralphs, Fry’s and other chains, said sales rose 3.5 per cent at stores open at least a year. That’s a key measure of a retailer’s financial health because it excludes the volatility from stores that open or close during the period.
The company stuck to its per-share earnings expectations of $2.73 to $2.80 for the year. Analysts expect $2.80 per share.
Shares edged down 55 cents to $40.96 in morning trading, with stocks on major U.S. markets moving mostly lower. The stock is up 63 per cent since the beginning of the year.