Kroger has reported an uplift in its margin amid higher sales in the second quarter, which management attributed to the simplification of its business.

The company’s gross margin for the quarter ended August 16 was 22.5 per cent, up from 22.1 per cent in the year-ago period. 

Management said the improvement was attributable to the sale of Kroger Specialty Pharmacy, which was completed last October, as well as lower supply chain costs.

Total sales for the period were flat at $33.9 billion, compared to the 0.4 per cent decline in the first quarter. Excluding Kroger Specialty Pharmacy, which contributed $718 million in the year-ago quarter, and fuel, sales increased 3.8 per cent. 

Identical sales without fuel were up 3.4 per cent, compared to the 1.2 per cent increase in the same period last year.

On the bottom line, operating profit rose 5.8 per cent to $863 million and attributable net earnings soared 30 per cent to $609 million. 

“Kroger delivered another quarter of strong results, which demonstrates the clear and measurable progress we’ve made on our priorities – to simplify our organization, to improve the customer experience and to focus on work that creates the most value,” commented chairman and CEO Ron Sargent.

The company has upgraded its outlook for the full year, expecting identical sales without fuel to increase 2.7-3.4 per cent, compared to the prior 2.25-3.25 per cent.