CINCINNATI (AP) -- Kroger Co., the nation's largest traditional supermarket chain, said Tuesday first-quarter profit jumped 10 percent but was slowed by labor unrest. Its shares sank 4 percent in morning trading.þþFor the three months ended May 26, earnings rose to $336.6 million, or 47 cents per share, from $306.4 million, or 42 cents per share, a year earlier.þþKroger, which still faces a tense labor situation in southern California, said its first-quarter earnings included charges of about 2 cents per share related to labor unrest at a distribution center near Louisville. Some 700 workers walked off the job at a distribution center for about two days in April during a dispute with two companies that operate the center for Kroger.þþFirst-quarter 2006 results included a one-time legal expense of 3 cents per share.þþSales rose 7 percent to $20.73 billion, from $19.42 billion.þþAnalysts surveyed by Thomson Financial predicted earnings of 48 cents per share on sales of $20.4 billion. Analysts typically exclude one-time items in their forecasts.þþSales at stores open at least a year, considered a key indicator of a retailer's success, were up 6 percent in the quarter. Not counting fuel sales, same-store sales rose 5.2 percent.þþAlso Tuesday, the company confirmed its fiscal year 2007 earnings guidance of $1.60 to $1.65 per share. The company bumped up the lower end of its expected range for identical supermarket sales growth, excluding fuel, to 3.5 percent to 5 percent from a previous range of 3 percent to 5 percent for the year.þþKroger also announced Tuesday that its board had approved a new $1 billion stock buyback. The company has emphasized improved customer service, wider selections and loyalty programs as well as price discounts in competing in an increasingly fragmented retail food industry.þþ''The new share repurchase program reflects our confidence in the company's Customer 1st strategic plan and our belief that Kroger shares represent an attractive investment opportunity,'' David B. Dillon, Kroger's chairman and chief executive, said in a statement.þþKroger shares fell $1.19 to $28.47 in morning trading. Kroger stock recently reached a 52-week high of $31.94, after trading as low as $20.10 nearly one year ago.þþIn southern California, grocery workers this week voted to authorize a strike by their union if stalled negotiations with Ralphs and two other chains fail. A labor standoff there three years ago disrupted business for several months at Ralphs stores.þþKroger gained an agreement over the weekend with union workers in Texas, and earlier reached an agreement with workers in Michigan.þþKroger operates 2,458 supermarkets and multi-department stores in 31 states, under two dozen local banners that include Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smith's, Fry's, Dillons, QFC and City Market. Kroger announced last week that it will buy 20 Farmer Jack stores in the Detroit area from The Great Atlantic & Pacific Tea Company Inc., after an April announcement it was buying 18 Scott's Food & Pharmacy stores in northeast Indiana from Supervalu Inc.þþ
Source: NY Times
