US supermarket chain Kroger Co topped fourth-quarter profit and sales estimates on Thursday, helped by higher demand for its high-margin private-label brands.
The company has been able to lure shoppers away from its rivals with its wide range of offerings from plant-based meats to its own line of seltzer waters that are sold at competitive prices.
It has also been investing in store layouts and improving delivery services to gain more market share in the competitive US grocery space dominated by retail giants Walmart and Amazon.com, while also beefing up its digital play.
Kroger maintained its forecast for fiscal 2020 and said it excludes the impact of coronavirus, which has infected thousands and killed over 3,000, including 11 in the United States.
Excluding one-time items, the company earned 57 cents per share, beating analysts' average estimate of 55 cents, according to IBES data from Refinitiv.
Gross margin came in at 22.1% for the quarter ended 1 February, compared with expectation of 21.91%. Sales rose 2.1% to $28.89 billion, beating analysts' estimate of $28.87 billion.
Sales at stores open for more than a year rose 2%, excluding the impact of fuel prices. Analysts had expected a 2.09% growth.
Net earnings attributable to Kroger rose to $327 million, or 40 cents per share, from $259 million, or 32 cents per share, a year earlier.
The company's shares were up 1% at 31.30 before the bell.