(Reuters) – Kroger Co raised its expectations for annual same-store sales and profit on Friday, betting on demand for its groceries and household essentials that has not been dented by higher prices.
Shares of the Cincinnati, Ohio-based grocer that also topped quarterly sales estimates, rose 3.3% in premarket trading.
Grocery retailers tend to perform well in an economic turmoil, as cash-strapped consumers prioritize spending on food and household essentials over discretionary products.
Kroger has also benefited from demand for its store-brand cheese, meats and other groceries as rampant inflation pushes more Americans toward cheaper alternatives.
Same-store sales, excluding fuel, climbed 5.8% in the second quarter, compared with estimates of a 4.6% rise, according to IBES data from Refinitiv.
The U.S. supermarket chain forecast adjusted same-store sales growth of 4% to 4.5% for fiscal 2022, compared with its prior outlook of a 2.5% to 3.5% increase.
The company forecast annual earnings per share between $3.95 and $4.05, compared with its prior outlook of $3.85 to $3.95.
(Reporting by Uday Sampath and Mehr Bedi in Bengaluru; Editing by Vinay Dwivedi)
