Slide 1: Kroger Q3 2022 Earnings Release
Kroger Q3 2022 Earnings Release December 1, 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 Celebrated the five-year anniversary of Received the Association of Washington Business Honored by the U.S. Hispanic Chamber of ambitious Zero Hunger | Zero Waste social "Leading Environmental Practices" award in Commerce with Employee Resource Group of the and environmental
Slide 4: Key Initiatives Drive Strong Q3 Results
Key Initiatives Drive Strong Q3 Results +6.9% $841M $0.55 ID Sales(1) GAAP Operating Profit GAAP EPS +10% $1,094M $0.88 Digital Sales Adjusted FIFO Adjusted EPS Operating Profit +12% +13% Growth in Adjusted FIFO OP Growth in Adjusted EPS (1) Excluding Fuel 4 4
Slide 5: Q3 2022 Highlights: Leading with Fresh, Accelerating with Digital
Q3 2022 Highlights Leading with Fresh, Accelerating with Digital Topline Growth • Fresh Seamless • Expanded Fresh Produce • Improved delivery sales by Initiative with 1,252 stores 34% now certified driving higher identical sales • Shortened Pickup lead times to no more than three hours across all •
Slide 6: Q3 2022 Highlights: Margin Expansion
Q3 2022 Highlights Leading with Fresh, Accelerating with Digital Margin Expansion • Productivity Improvements • Growing Alternative Profit • On track to achieve annual cost savings goal of $1B for fifth • Expanded Kroger consecutive year Precision Marketing’s advertising • Improved Pickup cost-to-se
Slide 7: Live Our Purpose
Live Our Purpose • Kroger Scholars: Awarded scholarships to 120 children of Kroger associates; with a total of more than $4.5 million awarded since 2008 • Kroger Wellness Festival: Hosted a two-day event that featured an all-star lineup of celebrities, professional athletes and wellness experts in s
Slide 8: 2022 Updated Full-Year Guidance
2022 Updated Full-Year Guidance Adjusted Metric* FY22 Guidance as of September 9, 2022 FY22 Guidance as of December 1, 2022 IDs (%) 4.0% - 4.5% 5.1% - 5.3% EPS ($) $3.95 - $4.05 $4.05 - $4.15 Operating Profit ($B) $4.6 - $4.7 $4.8 - $4.9 Tax Rate** 22% 22% Cap Ex ($B) $3.4 - $3.6 $3.2 - $3.4 Free Ca
Slide 9: Investment Thesis
PRELIMINARY DRAFT – SUBJECT TO FURTHER DUE DILIGENCE 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 • Fi
Slide 10: Appendix
Appendix 10
Slide 11: 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 2022 2021 2022 2021 SALES $ 34,198 100.0% $ 31,860 100.0% $ 113,436 100.0% $ 104,840 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHO
Slide 12: Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) November 5, November 6, 2022 2021 ASSETS Current Assets Cash $ 241 $ 324 Temporary cash investments 675 1,964 Store deposits in-transit 1,209 1,140 Receivables 2,019 1,914 Inventories 8,666 7,520 Prepaid and other current
Slide 13: Consolidated Statements of Cash Flows
Table 3. THE KROGER CO. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) (unaudited) YEAR-TO-DATE 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings including noncontrolling interests $ 1,798 $ 1,097 Adjustments to reconcile net earnings including noncontrolling interests to net cash pr
Slide 14: 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 15: 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: 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 17: Net Earnings Per Diluted Share Excluding the 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 year-to-date pre-tax adjustment to OG&A expenses for pension plan withdrawal lia
Slide 18: 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 19: Thank you
Thank you For additional information, please visit ir.kroger.com