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Kroger Earnings Top As Shoppers 'Less Cautious'

Kroger shares jumped to a new high Thursday after the grocery giant reported better-than-expected Q1 profit and sales as shoppers turned "less cautious.

Topping analysts' earnings estimates wasn't a big surprise — Kroger (KR) had beaten them in six of the prior eight quarters.

The nation's largest supermarket chain, and operator of Ralphs, Smith's, Food 4 Less and other branded chains, said earnings per share rose nearly 19% to $1.09. Revenue climbed 10% to $32.96 billion.

Wall Street had expected $1.05 EPS on $32.64 billion in revenue.

Same-store sales, excluding fuel sales, rose 4.6%.

"Our customers have exhibited less cautious spending behavior," CEO Rodney McMullen said on a call with analysts.

Kroger raised its full-year EPS guidance to $3.19 to $3.27 from $3.14 to $3.25. The midpoint of the revised guidance is in line with analyst consensus for $3.23.

Kroger shares gapped up 5% to 49.66 in heavy volumehttp://www.investors.com/stock-market-today/. The stock hit a record 50.20 intraday.

"Our strong first-quarter results set us up to deliver a 12%-15% net earnings growth rate for the year, partly due to the benefit of Harris Teeter, compared to our long-term growth rate of 8%-11% plus the growing dividend," McMullen said in a post-earnings statement.

Kroger bought Harris Teeter in January for $2.4 billion, adding its 231 stores in eight mostly Southern states, bringing Kroger's portfolio to 2,642 supermarkets in 34 states and D.C.

Kroger was reportedly thwarted, however, in a bid for Safeway (SWY). The No. 2 U.S. supermarket operation agreed in March to a buyout by Cerberus Capital Management for more than $9 billion.

Kroger reported double-digit growth in natural foods as demand for such products continues to boom. But pure-play natural foods chains have been struggling amid stiffer competition.

After years of outperformance, Whole Foods Market (WFM) shares have been in a downtrend. Earnings growth has been decelerating for the upscale chain. Smaller rival Sprouts Farmers Market (SFM) has tumbled since sprinting out in last summer's IPO.

Whole Foods shares fell 3%, while Sprouts slid less than 1%.