US retail giant Kroger has announced a slight fall in its second-quarter profit as a result of higher merchandise costs and an increased tax rate, according to a press release from the company.
Despite the profits slide, the retailer has raised its forecast for the full year given that first-half results surpassed analysts’ estimates.
Net earnings for the second quarter totalled US$279.1m, down on the US$280.8m recorded in the same period last year.
Prior year net earnings benefited from a 27.6 per cent tax rate, however, compared with a tax rate of 34.5 per cent in the second quarter this year, Kroger said.
Total sales, including fuel, rose by 3.9 per cent to US$21.7bn during the three months to 11 August, compared with US$20.9bn for the same period last year.
Excluding fuel, total sales increased 3.6 per cent over the same period last year.
“We are pleased with Kroger’s strong performance in the second quarter,” said David B. Dillon, Kroger’s chairman and chief executive officer.
“Kroger shareholders once again benefited from our Customer 1st strategy. Increased customer loyalty and solid cost controls allowed us to grow sales, profitability, and shareholder value.”
As a result of strong first half performance and higher than anticipated share repurchase activity, Kroger is increasing its fiscal 2012 earnings guidance to a range of US$2.35 to US$2.42 per diluted share.
The company continues to expect identical supermarket sales growth for the full year, excluding fuel, of 3 per cent to 3.5 per cent.
“Every day, our associates are delivering a better shopping experience for our customers,” Dillon said.
“Kroger's increased earnings per share guidance for the year reflects our confidence that our Customer 1st strategy will continue to create value for our customers and shareholders alike.”
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