UPDATE 1-Kroger Q2 profit up on cost controls, stronger sales
Sept 12 (Reuters) - Kroger Co, the biggest U.S. supermarket operator, on Thursday reported a 14 percent jump in second-quarter profit as it capped costs and drove sales higher with programs for loyal shoppers, sending shares up almost 2 percent. Executives at the Cincinnati-based company that owns Ralphs, Smith's and Food 4 Less chains, recently vowed to deliver higher profits amid raging competition from retailers ranging from supermarket operator Safeway Inc and retail giant Wal-Mart Stores Inc to dollar stores and convenience marts. Kroger, a leader in using purchasing data to offer customized deals to customers, this year plans to spend $2.1 to $2.4 billion to maintain its debt rating, buy back shares, pay dividends and invest in its stores and operations. Its total sales rose 4.6 percent to $22.7 billion, including fuel for the quarter that ended Aug. 17. Excluding fuel, sales were up 3.9 percent. Net income increased to $317 million, or 60 cents per share, from $279 million, or 51 cents, a year earlier, on lower expenses in the latest quarter. Identical-store sales - which include results from stores open without expansion or relocation for five full quarters and are used to gauge a grocer's performance - were up 3.3 percent for the latest quarter, excluding the sale of gasoline. Kroger's booked a $13 million charge related to inventory accounting during the latest quarter, down from $35 million a year earlier. Operating, general and administrative costs plus rent and depreciation also declined as a percentage of sales. The company tightened its full-year forecast for identical supermarket sales growth, excluding fuel, to a range of 3 percent to 3.5 percent from 2.5 percent to 3.5 percent. It maintained its outlook for annual profit of $2.73 per share to $2.80 per share. Shares in Kroger were up 1.9 percent to $38.40 in early trading on the New York Stock Exchange.