Kroger forecast misses estimates

WASHINGTON — Kroger Co., parent company of Hutchinson-based Dillons and the largest U.S. grocery-store chain, projected full-year earnings lower than analysts estimated and said fourth-quarter profit fell 27 percent as health-care and labor costs advanced.

Net income declined to $255.4 million in the quarter ended Jan. 30 from $349.2 million a year earlier, the Cincinnati-based company said today in a statement. The average estimate of 16 analysts surveyed by Bloomberg was for profit of 34 cents.

For the full year, Kroger forecast per-share profit of $1.60 to $1.80 a share. Eighteen analysts surveyed by Bloomberg projected $1.81, on average.

Operating costs and fuel margins, along with the pace of economic recovery, are "uncertain and cause Kroger to be cautious" about its full-year forecast, the company said. Supermarket sales, excluding fuel, will increase as much as 3 percent at stores open at least 15 months without expansion or relocation, the chain said.

Operating, general and administrative expenses increased 2.8 percent to $3.15 billion in the fourth quarter. Sales advanced 7.2 percent to $18.6 billion, the company said. That compares with analysts' average estimate of $17.7 billion.