Our Brands power Kroger in Q1

The Kroger Co. said it is making good progress on its three-year transformation plan, thanks in part to impressive sales from its store brands division.

The Cincinnati-based grocer reported that its Our Brands sales were up 3.3% during the first quarter ended May 25, led by double digit growth in Simple Truth. Kroger says it launched 219 new Our Brands items during the quarter.

"We are building momentum in the second year of Restock Kroger, which is off to a solid start,” said CEO Rodney McMullen. “The entire company is focused on redefining the grocery customer experience, improved upon by exciting partnerships that will create value. We are confident in our ability to deliver on our plans for the year and our long-term vision to serve America through food inspiration and uplift."

Kroger reported $37.25 billion in revenue, down 1% compared with a year earlier but better than what analysts had forecast for the period, according to FactSet. Same-store sales, excluding fuel, rose 1.5%.

Kroger has been investing in its e-commerce operation and said digital sales grew 42% in the quarter.

Overall, Kroger reported a profit of $772 million, or 95 cents a share, compared with $2.03 billion, or $2.37 a share, a year earlier.

During the first quarter, Kroger expanded Grocery Pickup to 1,685 locations and Grocery Delivery to 2,126 locations, covering over 93% of Kroger households. The company introduced new Home Chef retail meal solutions, including oven-ready options, Heat & Eat choices and lunch kits. And it broke ground on the first Kroger-Ocado center in Monroe, Ohio, as well as the location of its second customer fulfillment center.

Kroger today operates 2,761 retail food stores under a variety of banner names.