Kroger Company (the) · NYSE:KR
Kroger Company (the) — The Kroger — Q2 2021 Earnings Presentation
23 slides from Kroger Company (the)'s earnings presentation, Sep 10, 2021
Slide 1: Kroger Q2 2021 Earnings Release
Kroger Q2 2021 Earnings Release September 10, 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 Named Winsight Grocery’s Business Achieved $4.1B in diverse supplier Hosted The Wellness Experience, a of the Year for the company’s spend in 2020, representing an virtual wellness platform and multi- sustainability efforts throughout 2020 increase of 21% vs. prior year day
Slide 4: Q2 2021 Highlights
Q2 2021 Highlights Leading with Fresh, Accelerating with Digital Feed the Human Spirit Margin Expansion • Associate Experience Topline Growth • Launched Fresh Start • Growing Alternative Profit associate training program • Leading with Fresh • Growth Accelerator: strong • Increased average hourly •
Slide 5: Key Initiatives Drive Strong Results
Key Initiatives Drive Strong Results +14.0% +114% 2-Year Stack Identical 2-Year Stack Digital Sales Increase* Sales Growth*** -0.6% -13% Q2 Identical Sales** Q2 Digital Sales Strength in fresh departments On track to double digital sales by 2023 *Identical sales, without fuel, 2-year basis represent
Slide 6: Key Initiatives Drive Strong Results
Key Initiatives Drive Strong Results $839M Operating Profit $0.61 EPS $947M FIFO Adjusted Operating Profit $0.80Adjusted EPS +23.0% +34.8% 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
Leading with Fresh Ghost Announced 142 Kitchen ToplineExpansion Margin Growth Go Fresh and Local Supplier New Our Brands Items Testing On-Demand Meal Accelerator Introduced Pickup and Cohort Delivery Accelerating with Digital On Track Pilot >340,000 With CFC Offering Sushi New Customers to Launches
Slide 8: Margin Expansion
Alternative Profit Double On Track Digit >1,600 Margin To Grow Growth in Media Brands Engaged Expansion Incremental OP and Kroger with KPM by $100M - Personal Finance $150M Increase Profitability Record On Track Speed To Deliver Fourth For Time to Pick an Consecutive Year Order in Store of $1B Cost
Slide 9: Live Our Purpose
Live Our Purpose • COVID Response: Partnered with Lyft Healthcare, Inc. after concluding #CommunityImmunity Giveaway in collaboration with the Biden Administration to increase vaccinations across the country. • To date, Kroger Health has administered more than 6.7 million doses of the COVID-19 vacci
Slide 10: 2021 Updated Guidance
2021 Updated Guidance FY21 Guidance as of New FY21 Guidance Adjusted Metric* June 17, 2021 New FY21 Guidance 2-Year Basis*** IDs (%) (4.0%) - (2.5%) (1.5%) - (1.0%) 12.6% - 13.1% (Stack) EPS ($) $2.95 - $3.10 $3.25 - $3.35 22% - 24% (CAGR) Operating Profit ($B) $3.5 - $3.7 $3.9 - $4.0 14.1% - 15.6%
Slide 11: Investment Thesis
Investment Thesis 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 ⎻ ID Sales Growth (ex. Fuel), 2-4% • I
Slide 12: Appendix
Appendix 12
Slide 13: 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 2021 2020 2021 2020 SALES $ 31,682 100.0% $ 30,489 100.0% $ 72,980 100.0% $ 72,038 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHOU
Slide 14: Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) August 14, August 15, 2021 2020 ASSETS Current Assets Cash $ 339 $ 372 Temporary cash investments 1,886 2,448 Store deposits in-transit 1,055 1,058 Receivables 1,961 1,526 Inventories 6,541 6,344 Prepaid and other current
Slide 15: 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 $ 612 $ 2,032 Adjustments to reconcile net earnings including noncontrolling interests to net cash prov
Slide 16: 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: 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 18: 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 19: 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 20: 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: 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: 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* SECOND QUARTER YEAR-TO-DATE 2021 2019 2021 2019 Net earnings attributable to the Kroger Co. $ 467 $ 297 $ 607 $ 1,069 Adjus
Slide 23: Thank you
Thank you For additional information, please visit ir.kroger.com 14