Kroger Co., the biggest U.S. grocery-store chain, reported fourth-quarter earnings that topped analysts’ estimates after same-store sales jumped and the company won market share from competitors.
Net income rose 23 percent to $518 million, or $1.04 a share, from $422 million, or 81 cents, a year earlier, the Cincinnati-based company said Thursday in a statement. Analysts had estimated 90 cents on average, according to data compiled by Bloomberg. Kroger also gave a full-year earnings forecast that topped analysts’ projections.
Kroger is benefiting from increased spending by Americans after lower gas prices and an improving job market put more money in their wallets. Chief Executive Officer Rodney McMullen, who took the reins last year, also has been integrating the Harris Teeter acquisition and adding workers to meet demand. The company said it created almost 25,000 jobs last year.
“2014 was an outstanding year by all measures,” McMullen said in the statement. “Kroger captured more share of the massive food market, delivered on our commitments and invested to grow our business.”
Kroger rose as much as 6.7 percent to $74.32 in early trading in New York. The stock had added 8.5 percent this year through Wednesday’s close.
Same-store sales, excluding fuel, jumped 6 percent in the fourth quarter. Analysts had estimated 4.8 percent. Total revenue rose 8.5 percent to $25.2 billion in the quarter, which ended Jan. 31. That matched projections.
Excluding some items, earnings will be $3.80 to $3.90 a share this year, the company said. Analysts had estimated $3.73. Identical-store sales will climb 3 percent to 4 percent, not counting fuel.
Kroger runs more than 2,600 supermarkets in 34 states, including the Fred Meyer, Ralphs and Fry’s chains. The company, which has almost 400,000 employees, also operates convenience stores and food-processing plants.