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CINCINNATI - Leading U.S. supermarket company Kroger Co. on Tuesday reported higher quarterly profit due to cost cutting and a push to improve customer service to offset competition from Wal-Mart Stores Inc., Reuters reports.
Kroger said net income in the fiscal second quarter ended Aug. 17 was $264.0 million, or 33 cents, a share, up from $255.7 million, or 31 cents a share, a year earlier.
Excluding one-time items, Kroger reported earnings of $267.1 million, or 33 cents a share, versus $262.7 million, or 32 cents a share, a year earlier.
The retailer said sales increased to $11.93 billion from $11.48 billion a year earlier. Identical food store sales, excluding fuel, rose 0.2 percent, while those including fuel, increased 0.8 percent.
"Our identical food-store sales showed continued improvement toward our goal of 2 percent to 3 percent growth above product cost inflation by the end of fiscal 2003," said Joseph Pichler, Kroger chairman and chief executive.
Citing price sensitive consumers, intense competition, and industry consolidation, Kroger lowered its earnings per share growth estimate for fiscal 2002 to 5 percent to 7 percent, before one-time items and goodwill expense, down from growth of 10 percent to 12 percent.
Kroger said the third-quarter identical food-store sales will be particularly challenging because of continued product cost deflation and difficult comparisons with the unusually strong sales in the weeks immediately following the attacks of Sept. 11.
The company believes that identical food-store sales in the third quarter may increase less than the 0.8 percent growth achieved in the second quarter.