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Shares of


(KRO) -

slid 5% Tuesday after the grocer said labor unrest muted first-quarter earnings growth.

The company also backed its full-year forecast and announced plans for a $1 billion buyback, but that failed to lift the stock. Shares of Kroger recently were down $1.53 to $28.03.

For the quarter ended May 26, the Cincinnati-based company earned $336.6 million, or 47 cents a share, up from $306.4 million, or 42 cents a share, a year ago.

Kroger said results were hit by charges related to a union dispute at one of its distribution centers in April. The issue cut earnings by about 2 cents a share.

Analysts polled by Thomson Financial were expecting the company to earn 48 cents a share.

Kroger's first-quarter sales increased 6.7% to $20.73 billion, narrowly topping Wall Street's forecast of $20.4 billion.

Same-store sales, or sales at stores open at least a year, increased 6%. Excluding a gain from fuel sales, same-store sales rose 5.2%.

In April, about 700 Kroger employees at a distribution center in Kentucky went on strike for two days after the two sides couldn't agree on new contract provisions.

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While the dispute ultimately was quickly resolved, the prospects for more labor troubles loom at Kroger. On Sunday, unionized grocery workers voted to authorize a strike against Kroger's Ralphs chain in Southern California, as well as



Vons division. California union workers at Albertsons, a unit of



, had already authorized a strike in March.

Earlier this month, Kroger faced a potential strike from workers at its Houston and Dallas stores. The sides approved a three-year contract on Monday.

Kroger reiterated its forecast for full-year earnings of $1.60 to $1.65 a share. Analysts, on average, project earnings of $1.66 a share.

As for the buyback, Kroger said its new plan replaces a previous $500 million program announced in May 2006.

"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," said David Dillon, Kroger chairman and chief executive, in a statement.