Kroger's fiscal Q3 earnings slipped 2% to US$195.9M as revenue grew 10% to US$20.59B, topping Wall Street's estimate; revenue at supermarkets open at least a year gained 5%, excluding fuel

CINCINNATI , December 1, 2011 () – Kroger Co.'s fiscal third-quarter net income slipped 2 percent, but the performance beat analysts' expectations and the nation's largest grocery chain raised its full-year earnings forecast.

Like many grocers, Kroger has been dealing with rising costs. The Cincinnati company has been passing along higher prices to consumers to offset those costs and increased supplier prices for meat, produce and other goods.

The operator of Kroger, Ralphs and other grocery chains reported Thursday that its net income slipped to $195.9 million, or 33 cents per share, for the period ended Nov. 5. That's down from $202.2 million, or 32 cents per share, a year ago.

The quarter included an inventory accounting charge of $61.6 million, which is much higher than a similar $11.5 million charge it incurred a year earlier.

The results still topped the 31 cents per share analysts surveyed by FactSet expected.

There were fewer shares outstanding in the current quarter.

Revenue increased 10 percent to $20.59 billion from $18.7 billion a year ago, beating Wall Street's $20.4 billion estimate.

Excluding fuel, revenue increased 5.1 percent from the prior-year period.

Revenue at supermarkets open at least a year gained 5 percent, taking out fuel. The company said that it is the 32nd straight quarter that the figure has increased.

This metric is a key gauge of a grocer operator's performance because it excludes results from supermarkets recently opened or closed.

Kroger now expects full-year earnings of $1.95 to $2 per share, up from a previous outlook for earnings between $1.85 and $1.95 per share. Analysts predict earnings of $1.95 per share for the year.

The company also boosted the low end of its guidance for revenue from supermarkets open at least a year. Kroger now anticipates a 4.5 percent to 5 percent increase for the year, excluding fuel. Its prior forecast called for the figure to rise 4 percent to 5 percent.

Its shares rose 30 cents, or 1.3 percent, to $23.48 in morning trading.

Kroger has 2,439 supermarkets and multi-department stores in 31 states under names including Kroger, City Market, Dillons, Jay C, Food 4 Less, Fred Meyer, Fry's, King Soopers, QFC, Ralphs and Smith's. The company also runs 796 convenience stores, 363 fine jewelry stores, 1,067 supermarket fuel centers and 40 food processing plants in the U.S.

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