(REUTERS) -- Kroger Co , the biggest U.S. supermarket chain, raised its forecast for 2011 earnings, helped by strong sales increases at established stores.
The company now expects earnings for the year of $1.95 to $2.00 a share, up from its previous forecast of $1.85 to $1.95. Analysts on average had forecast $1.96, according to Thomson Reuters I/B/E/S.
Shares of the company, which owns chains that include Ralphs and Food 4 Less, rose 1.1 percent in early trading on Thursday.
Kroger also narrowed its forecast for identical-supermarket sales growth, excluding fuel, to 4.5 to 5 percent for 2011. Its prior call for a rise of 4 percent to 5 percent. Identical-supermarket sales are a closely watched measure of sales at stores open without expansion or relocation for five full quarters.
Kroger's fiscal third-quarter net income was $195.9 million, or 33 cents per share, compared with $202.2 million, or 32 cents per share, in the year-earlier quarter.
Analysts, on average, were looking for 32 cents a share, according to Thomson Reuters I/B/E/S.
The company booked an inventory-related charge of $61.6 million in the latest quarter, versus $11.5 million in the year-earlier period.
Sales, including fuel, rose 10.3 percent to $20.6 billion. Identical-supermarket sales rose 5 percent, excluding fuel.
The company, which is known for its ability to hold down food prices, also said it expects 2012 earnings-per-share growth of 8 percent to 10 percent.
Kroger's shares were up 25 cents at $23.43 on the New York Stock Exchange in early trading.
(Reporting by Lisa Baertlein in Los Angeles and Brad Dorfman in Chicago; editing by John Wallace and Maureen Bavdek)