Kroger Company (the) · NYSE:KR
Kroger Company (the) — The Kroger — Q4 2021 Earnings Presentation
25 slides from Kroger Company (the)'s earnings presentation, Mar 3, 2022
Slide 1: Kroger Q4 2021 Earnings Release
Kroger Q4 2021 Earnings Release March 3, 2022
Slide 2: Safe Harbor
Safe Harbor This presentation includes certain statements that constitute “forward-looking statements” about Kroger’s financial position and expected performance. These statements are based on management’s assumptions and beliefs in light of currently available information. Such statements are indic
Slide 3: Feeding the Human Spirit
Feeding the Human Spirit Hosted nationwide holiday hiring event Celebrated holiday giving campaigns across the Collierville store reopened; associate specifically for veterans and military families enterprise, including a surprise visit from Mr. T. named Collierville Woman of the Year Supported disa
Slide 4: Q4 2021 Highlights
Q4 2021 Highlights Leading with Fresh, Accelerating with Digital Feed the Human Spirit Margin Expansion • Associate Experience Topline Growth • Leading with Fresh • Growing Alternative Profit • Named one of the Best Places • Growth Accelerator: strong to Work for LGBTQ Equality • Innovation: launche
Slide 5: Key Initiatives Drive Strong Q4 Results
Key Initiatives Drive Strong Q4 Results +14.6% +105% 2-Year Stack Identical 2-Year Stack Digital Sales Increase* Sales Growth*** +4.0% -13.3% Q4 Identical Sales** Q4 Digital Sales *Identical sales, without fuel, 2-year stack basis represents the sum of fourth quarter 2020 and fourth quarter 2021 ide
Slide 6: Key Initiatives Drive Strong Q4 Results
Key Initiatives Drive Strong Q4 Results $965M GAAP Operating Profit $0.75 GAAP EPS $1,014M FIFO Adjusted Operating Profit $0.91Adjusted EPS +15.7% +26.4% 2-Year CAGR FIFO Adjusted OP* 2-Year CAGR Adjusted EPS* *The 2-year basis items denoted with CAGR represent the compounded annual growth rate 6 ut
Slide 7: Fiscal 2021 Highlights
Fiscal 2021 Highlights Introduced Announced Launched Announced Boost by Kroger Strategic partnership Kroger Delivery Go Fresh and Plus annual with Bed Bath & Now, a First-of-its- Local Supplier membership Beyond to expand kind virtual Accelerator program selection to Kroger convenience store custome
Slide 8: Key Initiatives Drive Strong 2021 Results
Key Initiatives Drive Strong 2021 Results +14.3% 2-Year Stack Identical Sales +113% 2-Year Stack Digital Sales Increase* Growth*** +0.2% 2021 Identical Sales Increase** -3.2% 2021 Digital Sales With a path to double digital Strength in Fresh departments sales from 2021 to 2023 *Identical sales, with
Slide 9: Key Initiatives Drive Strong 2021 Results
Key Initiatives Drive Strong 2021 Results $3.5B GAAP Operating Profit $2.17 GAAP EPS $4.3B FIFO Adjusted Operating Profit $3.68Adjusted EPS +20.0% +29.6% 2-Year CAGR FIFO Adjusted OP* 2-Year CAGR Adjusted EPS* *The 2-year basis items denoted with CAGR represent the compounded annual growth rate util
Slide 10: Live Our Purpose
Live Our Purpose • Zero Hunger | Zero Waste: Donated 499 million meals to help end hunger in communities through Zero Hunger | Zero Waste and $343 million in total charitable giving in 2021 • Framework for Action: Diversity, Equity and Inclusion progress update: Donated additional $5 million into Th
Slide 11: Full Year 2022 Guidance
Full Year 2022 Guidance IDs (%) EPS ($) Operating Tax Cap Ex ($B) Free Cash Profit ($B) Rate** Flow ($B)*** Adjusted* 2.0% - 3.0% $3.75 - $3.85 $4.2 - $4.3 23% $3.8 - $4.0 $2.0 - $2.2 * Without adjusted items, if applicable; Identical sales is without fuel; Operating profit represents FIFO Operating
Slide 12: Investment Thesis
Investment Thesis Total Shareholder Returns of 8-11% Leading Market Position with Proven Value Strong Balance Sheet & Exciting Growth Opportunities Creation Model Resilient Free Cash Flow • No 1 or No 2 Market Share in • Net Earnings Growth, 3-5% • Strong Free Cash Flow Yield Majority of Markets ⎻ I
Slide 13: Appendix
Appendix Ww rd er
Slide 14: Consolidated Statements of Operations
Table 1. THE KROGER CO. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (unaudited) FOURTH QUARTER YEAR-TO-DATE 2021 2020 2021 2020 SALES $ 33,048 100.0% $ 30,737 100.0% $ 137,888 100.0% $ 132,498 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREH
Slide 15: Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) January 29, January 30, 2022 2021 ASSETS Current Assets Cash $ 311 $ 371 Temporary cash investments 1,510 1,316 Store deposits in-transit 1,082 1,096 Receivables 1,828 1,781 Inventories 6,783 7,063 Prepaid and other curren
Slide 16: Consolidated Statements of Cash Flows
Table 3. THE KROGER CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) YEAR-TO-DATE 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings including noncontrolling interests $ 1,666 $ 2,588 Adjustments to reconcile net earnings including noncontrolling interests to net cash pr
Slide 17: Supplemental Sales Information
Table 4. Supplemental Sales Information (in millions, except percentages) (unaudited) Items identified below should not be considered as alternatives to sales or any other GAAP measure of performance. Identical sales is an industry- specific measure and it is important to review it in conjunction wi
Slide 18: Reconciliation of Net Total Debt and Net Earnings to Adjusted EBITDA
Table 5. Reconciliation of Net Total Debt and Net Earnings Attributable to The Kroger Co. to Adjusted EBITDA (in millions, except for ratio) (unaudited) The items identified below should not be considered an alternative to any GAAP measure of performance or access to liquidity. Net total debt to adj
Slide 19: Net Earnings Per Diluted Share Excluding the Adjustment Items
Table 6. Net Earnings Per Diluted Share Excluding the Adjustment Items (in millions, except per share amounts) (unaudited) The purpose of this table is to better illustrate comparable operating results from our ongoing business, after removing the effects on net earnings per diluted common share for
Slide 20: Net Earnings Per Diluted Share Excluding Adjustment Items (continued)
Table 6. Net Earnings Per Diluted Share Excluding the Adjustment Items (continued) (in millions, except per share amounts) (unaudited) (a) The amounts presented represent the after-tax effect of each adjustment. (b) The pre-tax adjustment to OG&A expenses for pension plan withdrawal liabilities was
Slide 21: Operating Profit Excluding the Adjustment Items
Table 7. Operating Profit Excluding the Adjustment Items (in millions) (unaudited) The purpose of this table is to better illustrate comparable operating results from our ongoing business, after removing the effects on operating profit for certain items described below. Adjusted FIFO operating profi
Slide 22: Two-Year Financial Results
Table 8. Two-Year Financial Results (in millions, except per share amounts) (unaudited) The purpose of this table is to better illustrate comparable two-year growth from our ongoing business for the current year for identical sales without fuel, adjusted operating profit and adjusted net earnings pe
Slide 23: Two-Year Financial Results (continued)
Table 8. Two-Year Financial Results (continued) (in millions, except per share amounts) (unaudited) NET EARNINGS PER DILUTED SHARE EXCLUDING THE ADJUSTMENT ITEMS TWO-YEAR CAGR* FOURTH QUARTER YEAR-TO-DATE 2021 2019 2021 2019 Net earnings attributable to the Kroger Co. $ 566 $ 327 $ 1,655 $ 1,659 Adj
Slide 24: Adjusted Free Cash Flow
Table 9. Adjusted Free Cash Flow (in millions) (unaudited) Adjusted free cash flow is an important performance measure used by management, and management believes it is also a useful metric for investors and analysts to evaluate the Company's ability to generate additional funding from business oper
Slide 25: Thank you
Thank you For additional information, please visit ir.kroger.com 15