Kroger, the largest U.S. supermarket operator by store count, reported a better-than-expected rise in quarterly profit as costs fell.
Shares of the company, which owns the Ralphs, Smith's and Food 4 Less grocery chains, rose 3.3 percent in premarket trading on Thursday.
The company's first-quarter sales, excluding fuel, rose 2.4 percent at stores open for more than a year without expansion or relocation, slightly below analysts' average estimate of a 2.5 percent rise, according to research firm Consensus Metrix.
Total operating expenses, excluding fuel and Roundy's, fell 4 basis points as a percent of sales compared to the last year. The company acquired smaller rival Roundy's in 2015.
Net income attributable to Kroger rose about 10 percent to $680 million, or 70 cents per share, in the first quarter.
The company, which owns the Ralphs, Smith's and Food 4 Less grocery chains, said total sales rose 4.7 percent to $34.60 billion.
Analysts on average had expected earnings of 69 cents per share, according to Thomson Reuters I/B/E/S.
The company reiterated its full-year 2016 profit forecast of $2.19 to $2.28 per share.
Up to Wednesday's close of $35.71, the stock had fallen about 15 percent this year.