Citi Reiterates Hold on Kroger

Citi is out with its report today on Kroger KR, reiterating Hold. In a note to clients, Citi writes, "While KR has generated strong comps for 30 straight quarters including a +4.6% gain in 1Q11 ex-fuel, EPS growth has lagged in recent years. However, we believe that the company's investments in its Customer First strategy and unique rewards programs are driving improved traffic and KR should experience an acceleration in EPS growth in 2011. The company is using targeted promotions and strong customer analytics to reduce cherry-picking and get the right product at the right price into its stores. In addition, KR plans on using the remaining $600M of its share repurchase program in F2011 to buy back stock. We reiterate our Hold (2M) rating." Citi maintains its $26 PT on KR. Shares of KR closed Monday at $24.04, up 0.17% from Friday's close.