Kroger (NYSE: KR) and Costco (NASDAQ: COST) released their quarterly earnings on Thursday. Kroger's earnings topped Wall Street expectations, but Costco didn't fare so well, and saw profit slide by 15 percent.
Kroger had a strong quarter as customers continued to respond well to its remodeled store formats, which include both larger and smaller locations that cater to various neighborhoods and markets. The chain has also recently expanded its specialty food sections and implemented updated technologies in stores and online, including new checkout technology, handheld price scanning units and online couponing services.
Kroger, the nation's largest supermarket chain, reported sales of $23.2 billion, slightly surpassing the $23.1 billion estimated by analysts. While the company met revenue expectations, profit dropped 8.7 percent to $422 million. Results were skewed by one less sales week from the same period last year. Adjusting for the shorter quarter, sales increased 4.8 percent.
For the year, Kroger reported a $1.5 billion profit for 2013, up 1.5 percent over 2012. The supermarket chain also said sales rose 1.8 percent to $98.4 billion during the fiscal year that ended Feb. 1. Adjusting for the 53 weeks in 2012, total sales rose 4.8 percent, while same-store sales, excluding fuel rose 3.6 percent.
Costco had a tougher time during the most recent quarter, reporting a deeper-than-expected 15 percent decline in profits. Costco blamed the dip in income on deep discounts offered during the holidays, unfavorable foreign exchange rates and a prior-year tax benefit.
The company said it earned $463 million compared with a profit of $547 million a year earlier. The year-earlier period was boosted by $62 million of tax benefits. Revenue rose 6 percent to $26.3 billion, narrowly missing analysts' predictions of $26.65 billion. Domestic same-store sales rose by 4 percent, while international sales were up 5 percent.
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