The Kroger Co.’s same-store supermarket sales rose 4.6% in the first quarter of fiscal 2014.
The Cincinnati-based retail giant also reported net earnings of $501 million, up from $481 million in the first quarter of 2013, Kroger officials announced in a June 19 conference call.
The first quarter of fiscal 2014 was the 42nd consecutive quarter in which Kroger showed same-store supermarket sales growth.
Same-store sales refer to sales in stores that have been open for at least a year.
The company also returned more than $1 billion in cash to shareholders in the quarter through its buyback program.
Kroger’s strong first quarter results put the company in good position to achieve 12-15% net earnings growth for the year, said Rodney McMullen, Kroger’s chief executive officer.
“Kroger delivered an outstanding first quarter,” McMullen said. “It’s a great start to what we believe will be another exceptional year.”
A big part of the company’s success this year, McMullen said, can be traced to its 2013 purchase of Matthews, N.C.-based Harris Teeter Supermarkets Inc.
Harris Teeter’s 212 stores in the southeast and mid-Atlantic gave Kroger more than 2,600 stores in the U.S.
Kroger’s total sales in the first quarter totaled $33 billion, 9.9% higher than the first quarter of 2013. Excluding fuel sales, company sales rose 11.4% in the quarter.
Inflation in the price of produce and other items was higher than expected in the first quarter, and should remain higher than originally forecast throughout the year, said Mike Ellis, Kroger’s president and chief executive officer.
The higher prices, however, did not seem to affect volumes, Ellis said.
“Even with higher inflation, we saw strong tonnage growth during the first quarter.”
Ellis said Kroger has received positive feedback from its decision to change one of its fresh food brands. The Kroger Value brand was changed in the first quarter to Heritage Farm.
Kroger-branded products made up 26% of total units sold and 25% of sales dollars, excluding fuel and pharmacy, in the quarter.