Slide 1: Kroger Q3 2023 Earnings Release
Kroger Q3 2023 Earnings Release November 30, 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: Q3 2023 Results
Q3 2023 Results (0.6 ) % $912M $0.88 ID Sales(1) +1.0% GAAP Operating Profit GAAP EPS Underlying ID Sales(1) +11% $1,022M $0.95 Adj. EPS Digital Sales Adj. FIFO Operating Profit +8% Growth (1) Identical sales without fuel would have grown 1.0% in the 3rd quarter of 2023 if not for the reduction in p
Slide 4: Full-Year 2023 Guidance - Updated
Full-Year 2023 Guidance* - Updated Adjusted Metric FY23 Guidance as of September 8, 2023 FY23 Guidance as of November 30, 2023 IDs (%) 1.0% – 2.0% 0.6% – 1.0% with underlying growth of 2.5% - 3.5% after with underlying growth of 2.1% - 2.5% after adjusting for the effect of Express Scripts adjusting
Slide 5: Progress on our go-to-market strategy
Fresh Personalization Q3 2023 Highlights Accelerated Fresh Produce Initiative with Grew digitally engaged households by 13%, 2,053 stores now certified, adding more increasing customer loyalty and promoting days of freshness for customers growth in alternative profit businesses like Leading with Fre
Slide 6: Strengthening our Value Creation Model
Strengthening our Value Creation Model Delivering Sustainable Total Shareholder Return of 8 – 11%* Supermarket Fuel Strengthened FIFO gross margin Average retail price of $3.77 this quarter ex-fuel through Our Brands vs. $3.84 the same quarter last year Strong performance and sourcing benefits Super
Slide 7: Associate Experience
Associate Experience • Leadership Recognition: Celebrated 38 company leaders named 2023 Progressive Grocer GenNext Honorees • Honoring Veterans: Hosted career expo event in support of commitment to hiring veterans and their families • Supporting Associates: Named by Axonify as a 2023 Frontline Champ
Slide 8: Live our Purpose
Live our Purpose Published 2023 ESG Report sharing progress Awarded $1 million in grants to Hispanic Hosted the Kroger Wellness Festival, a two on Kroger’s Zero Hunger | Zero Waste impact organizations to address food insecurity and expand day event celebrating physical, mental and plan digital equi
Slide 9: Investment Thesis
Investment Thesis Strong Business with Proven Value Strong Balance Sheet & Exciting Growth Creation Model Resilient Free Cash Flow Opportunities(1) • 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: 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 2023 2022 2023 2022 SALES $ 33,957 100.0% $ 34,198 100.0% $ 112,975 100.0% $ 113,436 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHO
Slide 12: Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) November 4, November 5, 2023 2022 ASSETS Current Assets Cash $ 254 $ 241 Temporary cash investments 1,471 675 Store deposits in-transit 1,197 1,209 Receivables 1,938 2,019 Inventories 7,931 8,666 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 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings including noncontrolling interests $ 1,430 $ 1,798 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 w
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 pre-tax adjustments for (gain) loss on investments were ($27) and $207 in the th
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