Kroger posted a $962 million profit on Thursday – up 45%, beating Wall Street expectations.

But total sales for the Cincinnati-based supermarket chain fell short: $45.2 billion in sales, up 1.3% from the same quarter a year ago. Wall Street analysts had forecast the company would post sales of $45.4 billion, according to Zacks Investment Research in Chicago.

Identical store sales excluding fuel increased by 3.5% during the fiscal quarter that ended May 20 – a key metric that measures sales growth excluding new or closed stores.

Last year, Kroger posted a $664 million profit in the first fiscal quarter on sales of $44.6 billion.

“As more customers are feeling the effects of inflation and economic uncertainty, we are growing customer households by providing fresher products at affordable prices,” Kroger CEO Rodney McMullen said in a statement.

While Kroger's sales grew modestly, the company's bottom line outperformed due to the improved performance of its investments. In the latest quarter, the grocer reported a $78 million loss versus a $532 million loss a year ago.

Kroger has an investment stake in London-based online grocer Ocado Group, which is their partner in U.S. home delivery. Last year, in a government filing, Kroger disclosed the value of its stake in the spring of 2022 plummeted by $532 million.

The results come as federal data show inflation – including at the supermarket – beginning to cool after jumping amid the COVID-19 pandemic and then the Russian invasion of Ukraine. In May, food purchased in stores for at-home consumption was 5.8% more expensive than in the same month in 2022 – the lowest year-over-year increase since October of 2021, according to the U.S. Bureau of Labor Statistics.

In 2022, Kroger contended with higher costs as inflation soared. Overall inflation eased in 2022, climbing 6.4% - slower than 7.2% a year earlier. But the cost of food purchased at supermarkets and supercenters rose at a faster rate: 11.8% - the worst calendar year increase since 1978. In recent years, supermarket inflation was 0.8% in 2019, 4% in 2020 and 6.5% in 2021.

Also last year, the grocer proposed acquiring rival Albertsons in a $25 billion takeover bid that regulators at the Federal Trade Commission are mulling whether to approve or fight.

In addition to Kroger stores, the Cincinnati-based grocer operates several regional supermarket chains in 35 states, including Fred Meyer, Harris Teeter, Ralphs, Mariano's, Fry's, Smith's, King Soopers, QFC and others. The company has more than 2,700 stores and employs 430,000 workers.

For the latest on Kroger, P&G, Fifth Third Bank and Cincinnati business, follow@alexcoolidge on Twitter.

This article originally appeared on Cincinnati Enquirer: Kroger sales slow as inflation eases; profit soars. Here's why