Kroger Co. (KR) saw its stock soar 5.10% in pre-market trading on Thursday, as the supermarket chain reported strong fourth-quarter 2024 earnings and provided an upbeat outlook for fiscal 2025.

For the fourth quarter ended February 1, 2025, Kroger reported adjusted earnings per share of $1.14, surpassing Wall Street estimates of $1.11. Identical sales excluding fuel increased by 2.4%, driven by higher demand during the holiday season.

The company's gross margin improved to 22.7%, up from 22.3% a year earlier, primarily due to the sale of its Kroger Specialty Pharmacy business and lower shrink costs. The operating profit margin also increased, aided by continued cost-saving initiatives.

For fiscal 2025, Kroger forecasts identical sales growth of 2-3% and adjusted earnings per share in the range of $4.60 to $4.80, compared to analysts' estimates of $4.82. The company expects to generate adjusted free cash flow of $2.8 billion to $3.0 billion.

Kroger also announced the commencement of a $5.0 billion accelerated share repurchase program, as part of its $7.5 billion share buyback authorization. This move reflects the company's commitment to returning excess cash to shareholders.

Interim CEO Ron Sargent expressed confidence in Kroger's strategic direction, stating, "Kroger is operating from a position of strength, delivering fourth-quarter results that came in ahead of expectations due to the strength of our model and the disciplined execution of our teams."

Investors cheered Kroger's strong performance, robust outlook, and efforts to streamline its business and enhance shareholder value, leading to the significant pre-market stock price increase.