Kroger reported a profit of $680 million, or 70 cents per share, in the quarter ending May 21, a 9.9% increase from $619 million, or 62 cents per share, in the same quarter last year. The results edged past analysts' expected 69 cents per share.
Revenue increased 4.7%, to $34.6 billion, below analysts' expected $34.83 billion. Same-store sales rose 2.4%, while a year earlier they had risen 5.7%.
However, Kroger said weak fuel-margin trends are expected to weigh down profits. The company previously reported full-year profit guidance of $2.19 to $2.28 per share, but now expects the 2016 number between the low end and the middle of that range.
Despite the mixed earnings, the results were better than expected, said Jim Cramer, TheStreet's founder and manager of the Action Alerts PLUS portfolio.
"Kroger's a real interesting situation," he said. "I didn't expect much from Kroger, and they gave me what I didn't expect -- not that much -- but that turned out to be better than what a lot of other people thought."
While same-store sales growth fell year-over-year, rumors swirled that Kroger would report an even worse number, he said.
"Kroger was doing 4%, now they're doing 2.4%, but there was a rumor they'd only be doing 1% same-store sales," he said. "This was obviously a better than expected situation."
The country's second-largest grocery seller after Wal-Mart (WMT) - Get Walmart Inc. Report is integrating Midwestern grocery chain Roundy's, which it acquired for $800 million in November, as well as attempting to attract Whole Foods Market (WFM) customers to its organic offerings.
Still, Cramer added, "Don't sell Whole Foods off this issue."
Kroger may soon be a buy if computerized trading drives its shares down.
"We've got big program trading, and program trading can drive down a stock like Kroger, and that's when you buy it," he said.