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CINCINNATI -- Kroger Co., the nation's largest supermarket chain and operator of nearly 800 convenience stores, said on Tuesday that its first-quarter earnings rose 12 percent, helped by improved performance in southern California after the end of a strike and lockout.
The Cincinnati-based company beat Wall Street estimates and also raised its earnings outlook for the year. Kroger said it earned $294.3 million, or 40 cents per share, in the quarter ended May 21 compared with $262.8 million, or 34 cents per share, a year ago.
Sales increased 6 percent to $17.9 billion, compared with $16.9 billion in 2004.
Analysts surveyed by Thomson First Call expected earnings of 35 cents per share for the first quarter of 2005.
Kroger reported a $675.9 million loss in March for its fourth quarter, but had predicted a return to profitability this year.
The company attributed much of its 2004 losses to the southern California strike-lockout that ended in February 2004. The labor problems affected Kroger's Ralphs division.
Kroger Chairman David Dillon told analysts Tuesday morning that the quarter was driven by strong sales at the company's food stores and fuel centers, the improvement in Southern California and solid performance at its convenience and jewelry stores.
On the strength of its first-quarter performance, Kroger raised its earnings estimate for fiscal 2005 to more than $1.24 per share, an increase of 3 cents over its earlier estimates.
Analysts on average are predicting full-year earnings of $1.23 per share.
The Cincinnati-based company operates 2,532 supermarkets and multi-department stores in 32 states under the names Kroger, Ralphs, Fred Meyer, Food 4 Less, King Soopers, Smiths, Frys, Frys Marketplace, Dillons, QFC and City Market. Kroger also operates 795 convenience stores, 436 jewelry stores, 536 supermarket fuel centers and 42 food-processing plants.