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During Thursday’s conference call to report Kroger’s first-quarter financial results, CEO Rodney McMullen gave some insight as to customer behavior.
“Our customers have exhibited less cautious spending behavior, for example,” McMullen said. “Consistent with the rise in consumer confidence index in May, our own customer research tells us that more customers perceive the economy to be in recovery. While it is obviously welcome news, the recovery remains fragile, especially for customers on a budget.”
Total sales for the quarter increased 9.9%, to $32.96 billion, compared to $30.00 billion for the same period last year. Kroger achieved its 42nd consecutive quarter of positive identical supermarket sales growth.
Kroger’s adjusted net earnings were $557 million, compared to $481 million for the same period last year.
This is the first period that includes Harris Teeter in Kroger’s statement of operations.
“Kroger associates continue to enhance our connection with all customers and achieve our key performance measures, which are allowing us to achieve our growth strategy and create shareholder value,” McMullen said. “Our strong first-quarter results set us up to deliver a 12%-15% net earnings growth rate for the year, partly due to the benefit of Harris Teeter, compared to our long-term growth rate of 8%-11% plus the growing dividend. We are achieving synergies from our merger with Harris Teeter. We are pleased to start the year with growth momentum while also returning $1.1 billion in cash back to shareholders this quarter through our buyback program.”
“Kroger’s Customer 1st culture, remarkably consistent execution and renewed commitment to growth have led us to 42 consecutive quarters of positive identical store sales,” McMullen added. “We will continue building on this resilient foundation to grow aggressively into the future.”
Kroger, one of the world’s largest retailers, employs more than 375,000 associates who serve customers in 2,642 supermarkets and multi-department stores in 34 states and the District of Columbia under two dozen local banner names including Kroger, City Market, Dillons, Food 4 Less, Fred Meyer, Fry’s, Harris Teeter, Jay C, King Soopers, QFC, Ralphs and Smith’s. The company also operates 787 convenience stores, 324 fine jewelry stores, 1,261 supermarket fuel centers and 37 food processing plants in the U.S.
Recognized by Forbes as the most generous company in America, Kroger supports hunger relief, breast cancer awareness, the military and their families, and more than 30,000 schools and grassroots organizations. Kroger contributes food and funds equal to 200 million meals a year through more than 80 Feeding America food bank partners.
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