Kroger's profit checks out 28% higher

CINCINNATI -- Kroger said Tuesday its profit jumped 28 percent in the second quarter, topping analyst expectations. The nation's largest traditional grocery chain boosted its outlook for the year.

The supermarket operator said it earned $267.3 million, or 38 cents per share, for the three months ended Aug. 18, up from $209 million, or 29 cents per share, a year ago. Revenue rose 7 percent to $16.14 billion in the quarter from $15.14 billion last year.

Analysts polled by Thomson Financial expected a profit of 34 cents per 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. Profits also were helped by reductions in distribution and advertising costs and in inventory loss because of theft, mistakes and other factors, Kroger said.

Sales at stores opened at least a year, considered a key indicator of a retailer's strength, were up 5.8 percent including fuel, and 5.1 percent excluding fuel.