Kroger Profit Rises 20%, Beating Estimates

Kroger Co., the nation’s largest supermarket operator, said its fiscal first-quarter earnings increased 20% to $276.5 million, or 33 cents a share, beating estimates by 2 cents, as acquisitions helped it negotiate lower prices from suppliers. Sales rose 6.2% to $14.3 billion. Kroger also got a boost from strong demand for groceries sold under its private-label brands, which generate more profit than national labels and account for about a quarter of sales. Kroger added 256 private-label products during the quarter. The purchase of Fred Meyer Inc. for $13.5 billion in May 1999 increased Kroger’s number of stores by one-third and helped it negotiate lower prices and boost gross margins. Kroger rose $1.06 to close at $19.75 on the New York Stock Exchange.