CINCINNATI — Kroger Co. rang up double-digit jumps in first-quarter revenue and net income, as the grocery chain drew more frequent shoppers with loyalty rewards while gas and grocery prices rose.
The nation's largest traditional grocer also raised its full-year earnings guidance Thursday after the strong results.
Kroger said net income rose to $432.3 million, or 70 cents a share, up nearly 16 percent from $373.3 million, or 58 cents per share, a year ago. Revenue rose 11 percent to $27.5 billion.
Analysts expected earnings of 64 cents per share on $26.4 billion in revenue.
Revenue at supermarkets open at least five quarters, a key retail indicator that doesn't count newly opened stores, rose 4.6 percent, excluding fuel sales.
Besides strong sales boosted by store gas stations, Kroger cited more new and frequent shoppers, and company cost reductions and improved productivity.
Kroger now expects earnings for the full year of $1.85 to $1.95, up from an earlier projection of $1.80-$1.92, and said it expects to be near the high end of the range. Analysts surveyed by FactSet expect $1.92 per share on revenue of $87.6 billion.
Kroger also raised its outlook for revenue at stores open at least five quarters to between 3.5 percent and 4.5 percent for the year, up from 3 percent to 4 percent, excluding fuel. Kroger has posted 30 straight quarters of increases in the measure.
"Our guidance for the year reflects the balance we strive to achieve across our business — including strong identical sales growth and outstanding cost control, as well as increased earnings and earnings per share," David B. Dillon, chairman and CEO, said in a statement.
Kroger shares rose 2.4 percent, or 56 cents to $23.51 in morning trading. They have traded from $19.57 to $25.48 in the past year.
Kroger has steadily expanded its gas business, now with more than 1,000 store gas stations. Without gas sales — U.S. gas prices were roughly a $1 more a gallon over the previous year — Kroger said revenue was up 5 percent for the quarter.
Shoppers using Kroger loyalty cards can earn rewards of up to $1 off a gallon at store gas stations, and Kroger has also expanded a tie-in with Shell Oil that allows customers to get 10 cents off on Shell gas.
Kroger had said earlier it saw modest inflation in grocery prices that it was passing along; higher prices also help its store- brand products that are usually priced below national brands.
Kroger operates 2,449 grocery stores in 31 states, some under local banners such as Fred Meyer, Ralphs, Fry's, Smith's Food 4 Less and King Soopers.