Apparently, Kroger (KR) didn’t get the memo. Traditional supermarkets were supposed to be on the ropes a couple years ago with Whole Foods (WFM) encroaching on one end and Wal-Mart (WMT) on the other.

Kroger, the nation’s largest supermarket operator, has seen its stock go on a two-year tear, and after a beat-and-raise quarter, KR stock is setting to surpass its record high of $52.72.

The grocery business has indeed been tough throughout the recovery, as cash-strapped customers make fewer trips to the market, buy less when they’re there, and opt for cheaper (and lower-margin) products, but Kroger has managed to prosper.

Kroger’s acquisitions like the higher-end Harris Teeter chain are helping it from losing share to upscale competition like Whole Foods, and Kroger’s strategic bargains drive traffic to mass-market chains such as Dillon’s, Fred Meyer and Smith’s.

As a result, Kroger has managed to increase same-store sales in every quarter for more than 10 years.

Same-store sales, which exclude receipts from recently closed or opened stores, as well as gas sales, are a critical measure of a supermarket’s health. They show that the company can drive sales growth with its existing locations, which leverages costs, as opposed to driving revenue solely by opening more stores.

Kroger By the Numbers

For the most recent quarter, Kroger said profit rose to $347 million, or 70 cents a share, up from $317 million, or 60 cents a share, a year earlier. Analysts polled by FactSet were looking for earnings of 69 cents a share.

KR revenue grew 11.6% to $25.3 billion. Excluding gas sales, Korger’s top line rose 12.4%, as fuel prices declined year-over-year. Wall Street projected KR revenue at $24.9 billion. Kroger reported that its same-store sales rose 4.8%. Analysts expected Kroger’s same-store sales to increase 4.2%

Most importantly, KR upped its full-year profit forecast. Earnings are now pegged at $3.22 to $3.28 a share, with same-store sales growth of 3.5% to 4.3%. The old forecast called for earnings-per-share of $3.19 to $3.27 on 3% – 4% same-store sales growth.

The market applauded KR results by sending shares up more than 1% at the opening bell. KR stock is up 31% for the year-to-date, compared to an 8% gain for the S&P 500. Over the last two years, KR stock has beaten the broader market by more than 80 percentage points.

KR stocks looks set to maintain its market-beating course, as its capital investments in both core stores and acquisitions pay off. While KR stock may not be a bargain, it’s definitely not overpriced.

Kroger management says it can grow EPS at 8% – 11% a year, which makes the forward price-to-earnings multiple of 14 look reasonable, especially given Kroger’s commitment to raising the dividend and buying back stock. Over the last four quarters, KR returned $1.9 billion to shareholders through dividends and KR stock buybacks.

The days of really outsized outperformance may be behind KR stock, but it still looks like a market-beater.

As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.