Kroger (NYSE: KR) executives attribute the retailer's stronger quarterly earnings to an increase in consumer confidence, along with other factors.
Notably, the first quarter of Kroger's 2014 fiscal year is the 42nd quarter of consecutive positive same-store sales growth for the massive grocery retailer. Total sales increased 9.9 percent in the quarter to just shy of $33 billion. Excluding fuel, total sales rose 11.4 percent and its first quarter net earnings were $501 million, or 98 cents per diluted share.
"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," said Rodney McMullen, CEO of Kroger, Progressive Grocer reported. In addition, the chain's customers "have exhibited less cautious spending behavior," McMullen said. "Consistent with the rise in the Consumer Confidence Index in May, our own customer research tells us that more customers perceive the economy to be in recovery."
At the same time, McMullen cautioned, "The recovery remains fragile, especially for customers on a budget. We intend to keep delivering value and improving our connection with customers across the entire spectrum."
Meanwhile, Kroger's merger with Harris Teeter "is going extremely well," according to Michael Ellis, Kroger president and COO. "We are spending time with Harris Teeter and learning a lot about how they connect with customers. Their store standards and fresh foods are world-class. And our cultures are a great fit, which makes our integration work easy."
Ellis said he is also excited about Harris Teeter's online ordering and store pickup model, which he called "a program with a lot of promise."
Kroger's strong first quarter results set the company up to deliver a 12 to 15 percent net earnings growth rate for the year.
-See this Progressive Grocer article
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