Kroger Co. (KR) reported that its earnings rose 9.9% in the latest quarter and the supermarket chain reiterated that weak fuel margin trends are posing a drag on its profit outlook for the year.

Shares rose 3.1% to $36.08 in recent premarket trading as per-share earnings for the three-month period ended May 21 edged past analysts' expectations.

Kroger said its expects its 2016 per-share earnings will come in at between the low end and middle of its previous guidance for per-share profit of $2.19 to $2.28, based on current fuel margin trends that are projected at or slightly below the five-year average.

The low end would be Kroger's second-worst results since 2004.

The company, which is the second-largest retail food seller after Wal-Mart Stores Inc., affirmed its 2016 outlook for sales growth, excluding fuel, at established stores of 2.5% to 3.5%.

The Cincinnati-based company has integrating the stores it added with its Roundy's Inc. acquisition. It also has been investing in an effort to attract customers for its organic products from rivals such as Whole Foods Market Inc. Kroger also has lowered prices on staples like bread and milk as it faces competition from Wal-Mart and Costco Wholesale Corp.

Excluding fuel sales, identical-supermarket sales rose 2.4% in the latest quarter, compared with an increase of 5.7% a year earlier.

In all, Kroger reported a profit of $680 million, or 70 cents share, up from $619 million, or 62 cents a share, a year earlier.

Revenue increased 4.7% to $34.6 billion. Excluding fuel sales and its Roundy's acquisition, total sales improved by 3.5%.

Analysts polled by Thomson Reuters expected per-share profit of 69 cents and revenue of $34.83 billion.

Operating margin rose to 3.5% from 3.3%.

Write to Tess Stynes at tess.stynes@wsj.com

(END) Dow Jones Newswires

June 16, 2016 10:05 ET (14:05 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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