Kroger reported a nearly 10% jump in fiscal first-quarter sales, as the grocery chain’s results benefited from the recent $2.4 billion acquisition of regional chain Harris Teeter Supermarkets.
The quarterly results, which exceeded Wall Street’s expectations, were the first to include Harris Teeter–an acquisition Kroger (KR) announced last year and closed in January. That deal added 227 Harris Teeter stores to Kroger’s portfolio. Harris Teeter, which posted $4.7 billion in revenue last year, operates stores in the southeastern and mid-Atlantic markets.
Sales at identical stores, or locations opened for 15 months or longer, rose 4.6% excluding fuel. That exceeded the 3.5% growth projected by research firm Consensus Metrix.
Kroger’s better-than-expected results led the grocery chain to raise its financial targets for the year. It now sees profit between $3.19 to $3.27 a share and identical supermarket sales rising between 3% to 4% excluding fuel.
It remains to be seen how recent inflation in food prices could affect grocery chains like Kroger. The food index posted its largest increase since August 2011 in May, according to the Labor Department, which has reported a share increase in consumer prices for meats, poultry, fish and eggs over the past year.
For the latest period, Kroger reported a profit of $501 million, or 98 cents a share, up from $481 million, or 92 cents a share, a year earlier. Excluding previously disclosed charges tied to pensions, adjusted profit in the latest period totaled $1.09 a share. Sales jumped 9.9% to $32.96 billion.
Analysts polled by Bloomberg had projected profit of $1.05 a share on $32.64 billion in revenue.