Dec 1(Reuters) - Kroger Co raised its annual same-store sales and profit forecasts on Thursday, riding on steady demand for groceries and household essentials despite higher prices.
Shares of the U.S. supermarket chain, which is in the process of buying smaller rival Albertsons Cos Inc in a $25 billion deal, rose 3.1% in premarket trading.
Grocery retailers have largely been insulated from the impact of decades-high inflation, which has forced consumers to prioritize spending on food and other essentials over discretionary products.
Kroger has also benefited from demand for its store-brand cheese, meats and other groceries as rampant inflation pushes more Americans toward cheaper alternatives.
Last month, Walmart Inc also lifted its annual sales and profit forecast on boost from grocery demand.
Kroger forecast adjusted same-store sales growth of 5.1% to 5.3% in fiscal 2022, compared with its prior outlook of a 4% to 4.5% rise. It lifted its annual earnings per share forecast to between $4.05 and $4.15, from $3.95 to $4.05.
In comparison, discount store chain Dollar General Corp cut its annual profit forecast on Thursday due to high distribution and transportation costs.
Kroger's same-store sales, excluding fuel, climbed 6.9% in the third quarter ended Nov. 5, beating estimates of a 4.5% increase, according to IBES data from Refinitiv.
Excluding one-time charges, Kroger earned 88 cents per share, beating estimates of 82 cents.
Reporting by Uday Sampath in Bengaluru; Editing by Shinjini Ganguli