Kroger  remains a favorite grocer in the US. The company's recent quarter marked its 41st consecutive quarter of comps growth and reflected its ability to keep attracting shoppers. Let's see where the company is heading and why it is one of the best retail buys.

Fourth-quarter results
In the fourth quarter, Kroger reported earnings of $0.81 per share, $0.09 more than the analysts' consensus estimate of $0.72. Adjusting for the extra week in 2012, the company earned $0.78 per share in comparison with $0.71 in the previous year. Although total sales for the quarter sank 3.7% to $23.22 billion, this comfortably topped analysts' expectation of $23.14 billion. When adjusted for the extra week, sales grew 4.8% from last year. 


For fiscal 2013, adjusted EPS surged 13% to $2.85 per share. Total sales for the year climbed 3.9% to $98.4 billion, buoyed by 3.6% growth in comparable sales.

What is Kroger up to?
The American Customer Satisfaction Index (ACSI) recently ranked Kroger among the top retailers in the US. The company received its rating for its competitive prices and the fresh products it offers at its stores. Moreover, management's friendly behavior toward shoppers has also improved the overall customer experience. Kroger is confident that it will continue to satisfy its valued customers so it can keep growing in the future as well.

Since the last two years, Kroger's corporate brand, Simple Truth, has grown at an astonishing pace. The company expects Simple Truth sales to reach around $1 billion this year. Kroger's management invested heavily in Simple Truth last year as well; out of 937 new products introduced, 100 belonged to Simple Truth. In the latest quarter, corporate brand items made up more than 27% of units sold, which depicts once again the importance of these products for the company. The retailer anticipates that its corporate brands will grow even further in the coming years.

Digital coupons provide a huge way for retailers to reach customers through the Internet. To capture more market share with digital coupons, Kroger recently acquired YOU Technology, a San Francisco-based company which creates digital coupon platforms. At the moment, YOU Tech's network comprises 10,000 stores and it serves around 24 companies.

Kroger launched its first digital coupons in 2009; more than 500 million coupons were downloaded within the first three years, while 400 million coupons were downloaded during the last year alone. This shows that the digital coupons are getting more popular day by day, justifying Kroger's acquisition of YOU Tech.

Kroger has recently approached Safeway about buying some of its stores. Kroger is also in contact with Cerberus Capital Management, the private-equity firm which is the lead bidder for Safeway. However, it's still too early to say if Kroger will be able to buy Safeway's stores, as some analysts think that Safeway will prefer to be sold as a whole.

Kroger expects its full-year earnings to grow by 8%-11%; the EPS range now stands at $3.14-$3.25. It anticipates that identical-store sales will grow by 2.5% to 3.5%.

Competitors
Whole Foods Market delivered strong results in the first quarter of fiscal 2014. Total sales for the company picked up their pace to stand at $4.2 billion. Same-store sales also witnessed an increase of 5.4%. On the earnings front, Whole Foods once again did pretty well by posting diluted EPS of $0.42.

The company is trying to change its tag of being a high-priced retailer by adding more store-branded foods along with conventional fruits and vegetables. In addition, the company plans to expand its store base to 500 by 2017; currently, it has 373 stores.

In the current quarter, Whole Foods expects same-store sales of 5.5%-6.2%. However, its earnings forecast for fiscal 2014 has been trimmed down to $1.58-$1.65 per share from $1.65-$1.69 per share.

Over the last few quarters, SUPERVALU has been trying its best to achieve a major turnaround. Results from the latest quarter show that the company's efforts are finally paying off. In the third quarter, SUPERVALU's earnings jumped 8% to $0.12 thanks to several cost-cutting initiatives. However, its sales dipped from $4.05 billion to $4.01 billion as the company lost two big customers for its wholesale grocery operation.

Save A Lot's performance provided one of the highlights of the quarter, as it achieved comparable-sales growth of 1.7%. SUPERVALU expects Save A Lot to keep up the good work in the coming years as well.

Final thoughts
Once again, Kroger did a great job as its earnings and comps continued to grow. The company's top ranking from ACSI explains why it's one of the favorite stores for shoppers. Going forward, the retailer will keep growing, especially in its corporate brands. The acquisition of YOU Technology will ensure that Kroger keeps ahead of its competitors in the digital coupons market, which is growing at a tremendous pace. Kroger has a solid outlook for this year's earnings, which indicates the company's confidence in its future growth prospects. Taking all this into account, I believe Kroger is still one of the best retail investments at this point in time.

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The article Kroger Is Destined for More Glory originally appeared on Fool.com.

John Mackey, co-CEO of Whole Foods Market, is a member of The Motley Fool's board of directors. Zahid Waheed has no position in any stocks mentioned. The Motley Fool recommends Whole Foods Market. The Motley Fool owns shares of Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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