Attention, stock shoppers! Kroger (NYSE:KR) will open its books bright and early Tuesday morning.

Analysts are feeling optimistic about this grocer's impending results. Among the 14 polled, the consensus is that Kroger managed to increase its sales by nearly 6% against the year-ago quarter and hiked its profits per diluted share by almost 32%. The number of analysts predicting flat or declining profits: exactly zero.

Upbeat? No doubt. But these projections don't seem at all unreachable for a company that crushed estimates two quarters ago and matched them last quarter, delivering precisely the 42% earnings growth that Wall Street was looking for. What's more, analysts are actually giving the company a bit of breathing room this time around -- in each of the past two quarters, Kroger achieved sales growth of better than 6%. This quarter, the bar for that metric has been set a bit lower, at 5.9%.

The moderated expectations for Kroger on Tuesday, on both the sales and earnings fronts, seem designed to give this company an opportunity to deliver an "upside surprise," if not tomorrow, then at some point over the next three months. The company has set itself a very reasonable goal for the full fiscal year 2005, aiming to earn $1.24 per diluted share by year-end. To date, it already has $0.67 -- more than half of its target -- under its belt. If it can continue boosting earnings at this rate, it could well surpass that goal, as well as even the slightly higher $1.29 target that the Street has set for it.

Meanwhile, Kroger is giving its per-share earnings numbers -- and its investors -- quite a boost with a remarkable commitment toward improving its balance sheet and its returns to investors. Year to date, Kroger has used its $1.1 billion in free cash flow to buy back nearly $200 million worth of stock and pay down more than $1 billion worth of debt. Paying down the debt reduces interest payment obligations, freeing up additional cash flow in the future. Buying back the stock magnifies earnings per share, since companywide earnings are divvied up among fewer shares.

Expect to see both of these trends continue tomorrow, as free cash continues to flow strongly and the company exploits the remainder of its $170 million share-buyback authorization to return additional wealth to its owners.

For more Foolish news and views on this (shareholder-) friendly grocer, read:

Fools, now is the time to open your hearts and wallets to worthy causes! Please support our five Foolish charities at

Fool contributor Rich Smith does not own shares of Kroger.