10:44 AM EST, 12/05/2024 (MT Newswires) -- Kroger's ( KR ) fiscal third-quarter earnings came in ahead of Wall Street estimates while revenue missed expectations as the supermarket chain narrowed its full-year earnings outlook.

The company now expects adjusted earnings to come in between $4.35 and $4.45 per share for fiscal 2024, compared with its previous projections of $4.30 to $4.50. The current consensus on FactSet is for non-GAAP EPS of $4.44.

Identical sales without fuel are set to grow in a range of 1.2% to 1.5% in the ongoing fiscal year, compared with the prior forecast for a 0.75% to 1.75% rise. The Street is looking for a same-store sales increase of 1.3%.

"As we head into the final quarter of the year, we are narrowing the ranges of identical sales without fuel, adjusted (first in, first out) operating profit and adjusted EPS guidance," interim Chief Financial Officer Todd Foley said in a statement. "Our business is more diverse than ever and our model gives us confidence in our ability to deliver on our guidance, and continue to generate attractive and sustainable returns for shareholders."

For the three-month period ended Nov. 9, Kroger's ( KR ) adjusted EPS advanced to $0.98 from $0.95 the year before, topping the Street's view of $0.97. Sales edged down to $33.63 billion from $33.96 billion last year, falling short of analysts' $34.19 billion estimate. The grocery store operator attributed the decline in revenue to the sale of its specialty pharmacy business completed in October and to lower fuel sales.

Identical sales without fuel advanced 2.3%, up from a 0.6% decline a year ago. The Street was looking for a same-store sales increase of 1.8%. The first-in, first-out gross margin rate, excluding fuel, rose by 51 basis points on an annual basis mainly due to the sale of the specialty pharmacy business, the company's Our Brands performance and lower shrink, which refers to inventory lost due to theft or internal issues.

"Kroger ( KR ) achieved strong sales results in the third quarter led by our pharmacy and digital performance, which reflects the strength and diversity of our model," Chief Executive Rodney McMullen said. "While we expect the macroeconomic environment to remain uncertain near-term, the strength of our model gives us confidence in our ability to deliver value for customers and invest in our associates, while generating attractive and sustainable returns for shareholders."

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