UPDATE 3-Kroger profit beats estimates, stock jumps

(Adds company comments, byline; updates stock activity)

By Brad Dorfman

CHICAGO, June 24 (Reuters) - Kroger Co (KR.N: Quote, Profile, Research, Stock Buzz), the largest U.S. grocery chain, posted better-than-expected quarterly profit on Tuesday, helped by an emphasis on lower prices, gasoline discounts and other efforts to appeal to cash-strapped consumers.

The company also raised its sales forecast and the lower end of its earnings forecast for the full year, and its shares rose as much as 9.6 percent.

The company, which has also rolled out a $4-per-prescription generic drugs program and offered shoppers a bonus for cashing tax rebate checks at its stores, said its latest research shows its customers are most concerned about soaring food and gasoline costs.

Sales of Kroger's store brands also increased in the quarter, a sign that consumers are looking for lower-priced products.

"We did see solid growth in Kroger corporate brand share in the first quarter," said David Dillon, chief executive officer, during a conference call with analysts.

Kroger posted a fiscal first-quarter profit of $386.0 million, or 58 cents per share, up from $336.6 million, or 47 cents per share, a year earlier.

Identical-store sales -- stores open for at least five full quarters and which have not been moved or expanded -- were up 5.8 percent, excluding gasoline sales.