Kroger yesterday reported solid Q3 results that included total sales that increased 4.5% to $27.7 billion in the third quarter compared to $26.6 billion for the same period last year. Total sales, excluding fuel, increased 3.0% in the third quarter compared to the same period last year. Same-store sales were up 1.1 percent, higher than had been predicted by analysts and the second straight period of growth.

Net earnings rose to $397 million, from $391 million during the same period a year ago.
In a prepared statement, CEO Rodney McMullen said, “Restock Kroger is off to a great start. Customers are recognizing our efforts to redefine the customer experience and rewarding us with their loyalty. We continue to accelerate our digital and ecommerce offerings, to grow Our Brands, to lower prices for customers, and to invest in our associates.

“The holidays are always Kroger’s time to shine. In fact, we had our best ever Black Friday results for general merchandise, led by record sales at Fred Meyer. Everything we are doing revolves around our associates providing friendly service and fresh products to our customers.

“This quarter shows that by investing for the future, our business continues to improve and gain momentum. We remain confident in our ability to continue to grow identical supermarket store sales and market share for the balance of the year and in 2018.”

KC's View: I was amused by the fact that Jim Cramer of “Mad Money” yesterday referred to Amazon as the Death Star, suggesting that Kroger represents the Rebel Alliance in this metaphor. This is the same metaphor I’ve been using for quite some time, though I think it is important to remember that which company is the Death Star depends on where you’re standing. (Jeff Bezos would probably define his company as the Rebel Alliance, though he’s really more of a ‘Star Trek” guy.)

I’ve always felt that Kroger should not be counted out. They’ve gone through a rough stretch, but I’ve believed that they are uniquely positioned as a big company to meet the challenges created by Amazon and Walmart. That doesn’t mean there won’t continue to be challenges; I still think there are areas in which they need to move more quickly. But I think that Kroger is a superior company with a strong upside.