SECOND QUARTER Kroger boasts profits increase by 38 percent

The chain matched Wall Street's consensus target.
CINCINNATI (AP) -- Kroger Co., the nation's largest traditional grocery chain, said Tuesday its second-quarter profit rose 38 percent, boosted by a rebound in southern California stores following a costly four-month strike last year.
For the quarter ended Aug. 13, Kroger reported earnings of $196.5 million, or 27 cents per share, compared with $142.4 million, or 19 cents per share, in the same period a year ago.
Sales rose 6.8 percent to $13.9 billion from $13 billion last year. The company said it was seeing "sustained improvement" at its Ralphs and Food 4 Less supermarkets in southern California.
The results matched Wall Street's consensus target of 27 cents per share, the average estimate of 12 analysts surveyed by Thomson Financial, on projected revenue of $13.6 billion.
Kroger shares fell 25 cents to $19.97, or down 1.24 percent, in trading on the New York Stock Exchange.
The retailer also reaffirmed its forecast of $1.24 in earnings per share for the full year, driven by continued improvement in southern California supermarkets, improved results from other chains, lower interest expense, and fewer shares outstanding due to stock buybacks.
Analysts' consensus estimate for 2005 is $1.28 per share.
Performance in the first half of 2005 shows that Kroger's focus on customer service is setting its stores apart, said David B. Dillon, chairman and chief executive officer.
"We have been able to use cost reductions and productivity improvements to reinvest in our business and improve our customers' shopping experiences," he said in a statement. "We also recognize that a lot of opportunities remain for growing our business."