Kroger Bags a 15% Increase in Adjusted EPS in Q3

National grocery store chain Kroger (NYSE: KR  ) , which operates self-named stores as well as Fred Meyer, Ralphs, and QFC to name a few others, walked up and down the aisle with its head held high this morning after reporting its third-quarter earnings results before the bell.

For the quarter, Kroger delivered a 3.2% increase in revenue to $22.5 billion compared to the $21.8 billion reported in the year-ago period. The two takeaway numbers on the revenue side of the equation, though, are its identical supermarket sales growth of 3.5%, which excludes stores opened less than a year and those that were closed recently and gives us a better gauge of how its business is performing, and its revenue growth excluding fuel of 4.7%. Both figures would signal that Kroger's pricing power remains strong, which is important in an industry with razor-thin margins.

Kroger's quarterly GAAP EPS profit totaled $0.57 given a $0.04 tax benefit, but was actually down nearly 6% from last year. However, adjusted EPS, which excludes these one-time charges and gains, came in at $0.53, which was in-line with Wall Street's expectations and 15% higher than the year-ago period. Margins for the quarter dipped ever-so-slightly by 25 basis points despite the company's best efforts to cut operating costs as it tries to remain competitive with its peers.

Looking ahead, Kroger forecast fourth-quarter identical supermarket sales growth of 3% to 3.5%, while maintaining its full-year EPS guidance of $2.73-$2.80. As of this morning, Wall Street's consensus expectation called for $2.80 in EPS, according to Yahoo! Finance. 

Shares were down just shy of 4% in mid-afternoon trading.

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