Cincinnati-based Kroger Co. posted stronger-than-expected third-quarter earnings Thursday, recording comparable sales growth of 3.1% over the third quarter of 2020.
Total company sales were $31.9 billion in the third quarter, exceeding Wall Street’s estimates of a $31.23 billion tally and besting year-ago sales of $29.7 billion.
In light of its third-quarter momentum and sustained food-at-home trends, Kroger CFO Gary Millerchip said in a news release, the company has raised its full-year guidance to adjusted EPS of $3.40 to $3.50 and a comp-sales increase of 13.7% to 13.9% on a two-year stack.
Gross margin was 21.66% of sales for the third quarter. The FIFO gross margin rate, excluding fuel, decreased 41 basis points compared to the same period last year. The decrease was driven primarily by higher supply-chain costs and continued price investments, partially offset by sourcing benefits, according to the company.
"Kroger's strategy to lead with fresh and accelerate with digital continues to connect with our customers," company Chairman and CEO Rodney McMullen said in a statement. "Our agility and the commitment from our amazing associates is allowing us to navigate current labor and supply-chain conditions and provide the freshest food at affordable prices across our store and digital ecosystem."
Among the third-quarter highlights the company called out were an increase in the average hourly wage to more than $16 an hour, plans for five new Ocado-powered fulfillment centers, the launch of the Boost by Kroger Plus membership program and the rollout of 30-minute delivery through Kroger Delivery Now, offered in partnership with Instacart.