Slide 1: Kroger Q2 2023 Earnings Release
Kroger Q2 2023 Earnings Release September 8, 2023
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: Q2 2023 Results
Q2 2023 Results +1.0% ($479M) ($0.25) ID Sales(1) GAAP Operating Profit(2) GAAP EPS(2) +12% $989M $0.96 Adj. EPS Digital Sales Adj. FIFO Operating Profit +7% Growth (1) Identical sales without fuel would have grown 2.6% in the 2nd quarter of 2023 if not for the reduction in pharmacy sales from the p
Slide 4: Full-Year 2023 Guidance
Full-Year 2023 Guidance* • Identical sales without fuel of 1.0% – 2.0%, with underlying growth of 2.5% – 3.5% after adjusting for the effect of Express Scripts • Adjusted net earnings per diluted share of $4.45 - $4.60, including an estimated benefit from the 53rd week of approximately $0.15 • Adjus
Slide 5: Progress on our go-to-market strategy
Fresh Personalization Q2 2023 Highlights Celebrated the 10th anniversary of our $1B Grew digitally engaged households by Home Chef brand approximately 1.2M, increasing customer Leading with Fresh, loyalty and promoting growth in alternative Accelerated Fresh Produce Initiative with profit businesses
Slide 6: Strengthening our Value Creation Model
Strengthening our Value Creation Model Delivering Sustainable Total Shareholder Return of 8 – 11%* Supermarket Fuel Expanded FIFO gross margin ex- Average retail price of $3.65 this quarter fuel through strong Our Brands vs. $4.62 the same quarter last year Strong performance, lower supply chain Sup
Slide 7: Associate Experience
Associate Experience • Diverse Leadership: Celebrated 64 female leaders named as Top Women in Grocery Honorees by Progressive Grocer • Inclusive Workplace: Named as one of the Best Places to Work for Disability Inclusion by Disability:IN for the fourth consecutive year • Associate Focused: Received
Slide 8: Live our Purpose
Live our Purpose Announced commitment to donate 10 billion Supported disaster response efforts for those Launched revamped Kroger Health Savings Club meals as a combined company by 2030, upon impacted by the Maui wildfires to make medications more affordable and completion of its proposed merger wit
Slide 9: Investment Thesis
Investment Thesis Strong Business with Proven Value Strong Balance Sheet & Exciting Growth Opportunities(1) Creation Model Resilient Free Cash Flow • Conveniently located +2,700 stores • Net Earnings Growth, 3-5% • Strong Free Cash Flow Yield • First Party Data on 60M Households • ID Sales Growth (e
Slide 10: Appendix
Appendix 10
Slide 11: Table 1. Consolidated Statements of Operations
Table 1. THE KROGER CO. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (unaudited) SECOND QUARTER YEAR-TO-DATE 2023 2022 2023 2022 SALES $ 33,853 100.0% $ 34,638 100.0% $ 79,018 100.0% $ 79,238 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHOU
Slide 12: Table 2. Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) August 12, August 13, 2023 2022 ASSETS Current Assets Cash $ 263 $ 251 Temporary cash investments 2,157 851 Store deposits in-transit 1,141 1,087 Receivables 1,820 1,869 Inventories 6,828 7,315 Prepaid and other current as
Slide 13: Table 3. Consolidated Statements of Cash Flows
Table 3. THE KROGER CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) YEAR-TO-DATE 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings including noncontrolling interests $ 783 $ 1,397 Adjustments to reconcile net earnings including noncontrolling interests to net cash prov
Slide 14: Table 4. 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 w
Slide 15: Table 5. 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 16: Table 6. 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 (loss) per diluted common sh
Slide 17: Table 6. 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 adjustments for (gain) loss on investments were ($367) and ($103) in the
Slide 18: Table 7. 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 (loss) for certain items described below. Adjusted FIFO operatin