US grocery retailer Kroger has reported total sales of $33.6bn in the third quarter of fiscal 2024 (FY24), down 1.1% from $34bn the previous year.
The retailer attributed the decline in sales to the divestiture of the Kroger Specialty Pharmacy business and lower fuel sales.
Kroger's sales, excluding fuel and the impact of the pharmacy sale, saw an increase of 2.7% compared to FY23.
The retailer's identical sales without fuel also grew by 2.3%, marking a turnaround from a decline of 0.6% in the same quarter of the previous year.
Net earnings for Kroger stood at $618m over the quarter, down 4.3% from $646m in Q3 FY23.
Diluted earnings per share were $0.84, lower than the $0.88 reported in the same quarter of the previous year.
Its operating profit also saw a dip, coming in at $828m - a 9.2% decrease from $912m in Q3 FY23.
Gross margin remained stable at 22.9% of sales for the quarter.
Kroger's strategic initiatives have borne fruit, with digital sales growing 11% and sales of its own brands outpacing total grocery sales growth.
Kroger chairman and CEO Rodney McMullen said: "Kroger achieved strong sales results in the third quarter led by our pharmacy and digital performance, which reflects the strength and diversity of our model.
“We continued to grow total households this quarter by delivering exceptional value for customers, with low prices, personalised offers and great quality Our Brands products, all through a seamless shopping experience. We appreciate our associates for their continued efforts to elevate the customer experience, delivering on our key priorities of full, fresh and friendly.”
Looking ahead to the final quarter of the year, Kroger has narrowed its guidance range for identical sales without fuel, adjusted first-in-first-out (FIFO) operating profit, and adjusted earnings per share (EPS).
The adjusted EPS forecast is now between $4.35 and $4.45 compared to the previous guidance of $4.30 to $4.50.
Adjusted FIFO operating profit expectations have been adjusted to between $4.6bn and $4.7bn.
The retailer also reduced its identical sales without fuel growth to 1.20% to 1.50% from the previous outlook of between 0.75% and 1.75%.
