NEW YORK (AP) - Kroger Co. is raising its earnings outlook for the year after the nation's largest traditional supermarket chain reported a third-quarter profit that topped Wall Street expectations.
The Cincinnati-based company, which also operates Fry's, Food 4 Less and Ralphs, has been working to improve the shopping experience and build customer loyalty as it fends off competition from specialty grocers such as Whole Foods and big-box retailers such as Target, as well as dollar stores and drugstore chains.
As shopping habits change, Kroger has also been experimenting with new formats such as its larger "Marketplace" stores that have a bigger footprint and sell general merchandise in addition to groceries. It has also opened about a dozen smaller "Ruler" stores that focus primarily on cheaper, private-label products.
In an interview, CEO Dave Dillon has said that Kroger's supermarket format would continue to evolve to remain relevant. He noted that the boundaries between supermarkets, big-box retailers and dollar stores are also blurring.
For the three months ended Nov. 3, the company said revenue at locations open at least a year rose 3.2 percent. The metric is a key gauge of health because it strips out the impact of newly opened and closed locations.
The company said it earned $316.5 million, or 60 cents per share, for the period. That compares with $195.9 million, or 33 cents per share, a year ago. The most recent quarter included gains from a settlement with Visa and MasterCard and a reduction in the company's pension fund contributions.
Not including special items, the company earned 46 cents per share. Revenue rose 6 percent to $21.81 billion.
Analysts on average expected an adjusted profit of 43 cents per share on revenue of $21.55 billion, according to FactSet.
Kroger now expects to earn between $2.44 and $2.46 for the year, up from the previous range of $2.35 to $2.42.
Its shares were up almost 5 percent at $26.20 in premarket trading. The company operates more than 2,400 supermarkets and multi-department stores in the U.S.
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