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Shares of the supermarket chain rose 5% to $45.63 in early trading.
U.S. food inflation has continued to march higher, with Labor Department data showing that the food price index increased 0.5% in January.
Higher prices have forced consumers to hunt for cheaper alternatives, fueling strong demand for Kroger’s private-label brands such as Simple Truth and Home Chef.
Same-store sales for Kroger’s own brands jumped 10.1% in the quarter.
Kroger’s upbeat outlook is in contrast to downbeat 2023 profit forecasts from retail chains such as Walmart (NYSE:WMT), Target Corp (NYSE:TGT) and Dollar Tree Inc (NASDAQ:DLTR).
A focus on using automation across its businesses and streamlining its supply chain network have also helped the company, analysts have said, with support from its more profitable personal finance and media divisions.
Meanwhile, Kroger and Albertsons Cos Inc are advancing plans to sell between 250 and 300 stores they hope will alleviate U.S. antitrust concerns over their combination, Reuters reported last month.
The proposed $24.6 billion acquisition of Albertsons is under pressure from some U.S. lawmakers and consumer advocacy groups.
Kroger earned 99 cents per share, on an adjusted basis, for the fourth quarter ended Jan. 28, beating estimates of 90 cents, according to Refinitiv IBES data.
The company forecast adjusted earnings per share of between $4.45 and $4.60 for fiscal 2023, above estimates of $4.20.
Still, the company projected same-store sales growth, excluding fuel, of 1% to 2% in fiscal 2023, below the average estimate of a 2.23% increase.
