Kroger Company (the) · NYSE:KR
Kroger Company (the) — The Kroger — Q3 2021 Earnings Presentation
23 slides from Kroger Company (the)'s earnings presentation, Dec 2, 2021
Slide 1: Kroger Q3 2021 Earnings Release
Kroger Q3 2021 Earnings Release December 2, 2021
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 Released our 2021 Environmental, Hosted nationwide holiday hiring Received two Brandon Hall Group - Social and Governance (ESG) report, event with more than 20,000 Excellence in Human Capital outlining our achievements over the opportunities across the business Management Aw
Slide 4: Q3 2021 Highlights
Q3 2021 Highlights Leading with Fresh, Accelerating with Digital Feed the Human Spirit Topline Growth Margin Expansion • Associate Experience • Leading with Fresh • Growing Alternative Profit • Received two Brandon Hall Group Awards - Excellence in • Accelerate Sales: Home Chef • Growth Accelerator:
Slide 5: Key Initiatives Drive Strong Results
Key Initiatives Drive Strong Results +14.0% +103% 2-Year Stack Identical 2-Year Stack Digital Sales Increase* Sales Growth*** +3.1% -4.7% Q3 Identical Sales** Q3 Digital Sales Strength in fresh, deli/bakery, On track to double digital produce and floral and HBC sales by 2023 *Identical sales, withou
Slide 6: Key Initiatives Drive Strong Results
Key Initiatives Drive Strong Results $868M $0.64 EPS Operating Profit $974M FIFO Adjusted Operating Profit $0.78Adjusted EPS +22.1% +28.8% 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 utilizing annual
Slide 7: Topline Growth
Topline Growth Leading with Fresh Fresh $1B 216 Departments Annualized New Our Grew Faster Than Sales for Home Brands Items Total Company Chef Brand Introduced Identical Sales Without Fuel Accelerating with Digital Announced Launched Announced Five New Boost by Collaboration Customer Kroger Plus & w
Slide 8: Margin Expansion
Margin Expansion Alternative Profit On Track Strong Introduced To Grow Growth in Kroger Programmatic Incremental OP Personal Finance Advertising by $100M - Marketplace $150M within KPM Increase Profitability On Track Achieved To Deliver Fourth Lowest Cost to Serve Consecutive Year Ever for Pickup of
Slide 9: Live Our Purpose
Live Our Purpose • Kroger Health: • Partnered with Anthem Blue Cross and Blue Shield to offer new Medicare Advantage plans that include allowance to help customers purchase groceries and health items • Administered more than 8.5 million doses of the COVID-19 vaccine to customers and associates to da
Slide 10: 2021 Updated Guidance
2021 Updated Guidance FY21 Guidance as of New FY21 Guidance Adjusted Metric* September 10, 2021 New FY21 Guidance 2-Year Basis*** IDs (%) (1.5%) - (1.0%) (0.4%) - (0.2%) 13.7% - 13.9% (Stack) EPS ($) $3.25 - $3.35 $3.40 - $3.50 25% - 26% (CAGR) Operating Profit ($B) $3.9 - $4.0 $4.1 - $4.2 17.0% - 1
Slide 11: 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 12: Appendix
Appendix Ww rd er
Slide 13: Table 1. Consolidated Statements of Operations
Table 1. THE KROGER CO. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share amounts) (unaudited) THIRD QUARTER YEAR-TO-DATE 2021 2020 2021 2020 SALES $ 31,860 100.0% $ 29,723 100.0% $ 104,840 100.0% $ 101,761 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHO
Slide 14: Table 2. Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) November 6, November 7, 2021 2020 ASSETS Current Assets Cash $ 324 $ 367 Temporary cash investments 1,964 1,813 Store deposits in-transit 1,140 1,102 Receivables 1,914 1,610 Inventories 7,520 7,478 Prepaid and other curren
Slide 15: Table 3. 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 $ 1,097 $ 2,664 Adjustments to reconcile net earnings including noncontrolling interests to net cash pr
Slide 16: 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 wi
Slide 17: Table 5. Reconciliation of Net Total Debt and 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 18: Table 6. Net Earnings Per Diluted Share Excluding 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 19: Table 6. Net Earnings Per Diluted Share (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 20: 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 for certain items described below. Adjusted FIFO operating profi
Slide 21: Table 8. 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 22: Table 8. 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* THIRD QUARTER YEAR-TO-DATE 2021 2019 2021 2019 Net earnings attributable to the Kroger Co. $ 483 $ 263 $ 1,090 $ 1,332 Adju
Slide 23: Thank you
Thank you For additional information, please visit ir.kroger.com 14