Kroger Rises After Boosting Long-Term Profit Growth Forecast
Kroger Co. (KR), the largest U.S. grocery-store chain, gained the most in four months after raising its forecast for long-term profit growth as it increases store openings.
The shares climbed 4.3 percent to $24.44 at 12:53 p.m. in New York after earlier rising as much as 6 percent for the biggest intraday increase since June 14. Cincinnati-based Kroger had dropped 3.3 percent this year through yesterday.
Chief Executive Officer David Dillon said today in a presentation to investors that earnings per share will grow as much as 11 percent a year in the long term. That’s up from a previous forecast for a maximum of 8 percent.
The food seller will boost sales and profit by increasing total store square footage and by expanding into new markets, Dillon said during the conference. Kroger would consider the “right” acquisition to help it grow, he said.
“We are going to invest to grow and expand our store base, which will create more job opportunities over the next five years, and beyond,” Dillon said in a statement today.
Kroger, which has about 2,425 supermarkets and department stores, operates locations under the Ralphs, Food 4 Less and Dillons names. It also has convenience and fine jewelry stores, as well as fuel centers and food-processing facilities.
Kroger has been trimming costs, helping it report profit that topped analysts’ estimates in the first two quarters this year. The company also has raised its outlook for profit in its current fiscal year and approved a new $1 billion share buyback program.
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