cincinnati -- Kroger Co. said Tuesday that its profit rose 28% in its fiscal second quarter, topping analyst expectations. The nation's largest traditional grocery chain boosted its outlook for the year. Its shares rose 7.7%.
The supermarket operator said it earned $267.3 million, or 38 cents a share, for the three months ended Aug. 18, up from $209 million, or 29 cents, a year earlier. Revenue rose 7% to $16.14 billion from $15.14 billion in the year-earlier quarter.
Analysts polled by Thomson Financial had expected a profit of 34 cents a share on revenue of $16.02 billion.
The company said it was able to pass along cost increases for staples such as milk to customers while continuing to build customer loyalty with initiatives that include improved service, wider selections and incentive programs. Profit also was helped by reductions in distribution and ad costs and in inventory loss because of theft, mistakes and other factors, Kroger said.
Sales at stores open at least a year, considered a key indicator of a retailer's strength, were up 5.8% including fuel and 5.1% excluding fuel.