US grocery retailer Kroger has reported lower first-quarter net income, as earnings were dented by the southern California labour dispute earlier this year.

The company reported net income of US$262.8m, or 35 cents per diluted share, for the first quarter to 22 May 2004, compared to net earnings of $351.5m, or 46 cents per share in the year-ago period.

Kroger said it estimates the southern California labour dispute reduced net earnings by $71.6m, or 10 cents per share.

Total sales for the 16-week first quarter of fiscal 2004 increased 3.9% to $16.9bn. Identical food-store sales, including fuel, increased 1.3% and, excluding fuel, increased 0.3%. Excluding, for the entire quarter, the Ralphs and Food 4 Less stores affected by the work stoppage, identical food-store sales, including fuel, increased 1.6% and, excluding fuel, increased 0.5%.

“We are pleased that Kroger continues to grow our identical food-store sales in a challenging operating environment,” said chief executive David Dillon.

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“But there is more to be done. We plan to continue making investments in pricing, customer service and product variety to deliver strong, sustainable sales growth.”