Supermarket Operator Gives Shareholders Growth, Income
Supermarket operators are not known for growth, butKroger ( KR ) is expanding its top and bottom lines.
The nation's largest supermarket chain, which runs Ralphs, Food 4 Less, Fred Meyer and others, recently delivered its fifth straight quarter of double-digit profit growth.
Last week, Kroger reported earnings of 92 cents a share for its fiscal Q1 ended May 25. That marked an 18% increase from a year ago and topped analysts' expectations by 4 cents.
Kroger's sales rose 3% to a little over $30 billion, but that was slightly below views.
Still, the company raised its full-year profit outlook to a range of $2.73 to $2.80 a share. Previously, the firm expected $2.71 to $2.79 a share.
Loyalty programs, price cuts, fast lines and a knowledgable staff have helped bring in customers at a time of tough competition. Shoppers can buy meat, veggies and toilet paper at traditional supermarkets. And nowadays, they can also get these same items atWal-Mart ( WMT ),Target ( TGT ) or even dollar stores.
On Thursday, Kroger's board declared a quarterly dividend of 15 cents a share. The dividend will be paid Sept. 1 to shareholders of record Aug. 15.
The company pays 60 cents a share on an annual basis. At current prices, Kroger has a yield of about 1.7%. This is one of the lower yields among the 15 dividend-paying stocks in the Retail-Super/Mini Markets group.
Kroger went on a tear after breaking out past a 27.11 buy point from a flat base. The stock bolted 31% by May before pulling back to its 10-week moving average.
Last week, Kroger suffered a big downside reversal, as the market slumped into a correction. But the stock is staging a comeback this week.