Q2 Sales up 11.5% at Kroger
Total sales at the Cincinnati-based Kroger Co. increased 11.5 percent to $20.9 billion in the second quarter of fiscal 2011, compared with $18.8 billion for the same period last year.
Excluding fuel, sales for the second quarter, which ended Aug. 13, increased 5.2 percent over the year-ago period. Identical supermarket sales, without fuel, increased 5.3 percent in Q2 over last year, marking 31 consecutive quarters of same-store increases for Kroger.
“We are pleased with Kroger’s strong performance this quarter, which we believe is the outcome of our consistent approach to managing the business and executing our ‘Customer 1st’ strategy,” said David B. Dillon, Kroger’s chairman and CEO. “Our ongoing investments in the four keys – our people, products, prices and the shopping experience – continued to enhance our connection with customers and drive positive identical sales growth.”
Q2 net earnings totaled $280.8 million, or 46 cents per diluted share, compared to $261.6 million, or 41 cents per diluted share, a year ago.
Operating, general and administrative costs were 16.01 percent of sales. Excluding retail fuel operations, OG&A decreased 20 basis points from the same period last year. According to Kroger, the benefits of leverage from strong sales, productivity improvements and outstanding cost control more than offset rising credit card fees, incentive plan, health care and pension costs. Second quarter operating margin was 2.33 percent of sales
Capital investment, excluding acquisitions and purchases of leased facilities, totaled $428.5 million for the second quarter, compared with $402.5 million for the same period last year. Net total debt was $6.9 billion, a decrease of $49 million from a year ago.
Kroger increased its same-store sales guidance for fiscal 2011. The company now expects growth, excluding fuel, of 4 percent to 5 percent for the year.
“Faced with a sluggish economy, we remain focused on giving better value to our customers,” Dillon said. “We continue making investments that deliver value today and for the future for both customers and shareholders.”
Kroger operates 2,439 supermarkets and multidepartment stores in 31 states under two dozen local banner names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry’s, King Soopers, QFC, Ralphs and Smith’s.