Kroger Co., the largest U.S. grocery-store chain, reported second-quarter profit that exceeded analysts’ estimates after fending off price reductions by Wal-Mart Stores Inc.
Net income increased 2.8 percent to $261.6 million, or 41 cents a share, Cincinnati-based Kroger said today in a statement. That compared with the average analysts’ projection of 36 cents in a Bloomberg survey.
Sales by stores open for at least five quarters increased 2.7 percent as Kroger used promotions to compete with Wal-Mart, the world’s largest retailer. Revenue advanced 6 percent to $18.8 billion.
“We continue to build momentum through our Customer 1st strategy,” said Chairman and Chief Executive Officer David Dillon, referring to a program that uses data on consumer preferences to determine ways to drive sales.
Year-earlier profit was $254.4 million, or 39 cents a share.
Kroger rose 22 cents, or 1.1 percent, to $21.26 at 4:01 p.m. in New York Stock Exchange composite trading. The shares advanced 3.6 percent this year
Sales at U.S. retailers rose in August for a second consecutive month, easing concern the economy will stumble in the second half of the year.
Purchases increased 0.4 percent following a 0.3 percent gain in July that was smaller than previously estimated, Commerce Department figures showed today in Washington. Sales excluding automobiles advanced twice as much as forecast.
Eight of 13 major categories showed increases last month, led by grocery stores and service stations. The latter may reflect higher prices for gasoline.