Slide 1: Kroger Q2 2022 Earnings Release
Kroger Q2 2022 Earnings Release September 9, 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 Assisted in relief efforts in Eastern Kentucky with donations of funds and supplies, as well Celebrated 45 Top Women in Grocery Scored 100% on Disability:IN’s as delivery of more than 19,000 gallons of fresh honorees, including Trailblazer Mary Ellen Disability Equality Inde
Slide 4: Key Initiatives Drive Strong Q2 Results
Key Initiatives Drive Strong Q2 Results +5.8% $954M $1.00 ID Sales(1) GAAP Operating Profit GAAP EPS +8% $1,110M $0.90 Digital Sales FIFO Adjusted Adjusted EPS Operating Profit +17% +13% Growth in FIFO Adjusted OP Growth in Adjusted EPS (1) Excluding Fuel 4
Slide 5: Q2 2022 Highlights: Topline Growth
Q2 2022 Highlights Leading with Fresh, Accelerating with Digital Topline Growth • Fresh Seamless • Expanded Fresh Produce • Improved delivery sales by Initiative with 864 stores 34% now certified • Expanded national fulfillment network with an • Personalization additional customer • Introduced new f
Slide 6: Q2 2022 Highlights: Margin Expansion
Q2 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 • Delivered growth in consecutive year Kroger Precision Marketing fueled by • Improved Pickup cos
Slide 7: Live Our Purpose
Live Our Purpose In our recently published 2022 ESG report, we outlined our ESG progress, including the achievement of these five-year milestones in our Zero Hunger I Zero Waste social and environmental action plan: 2.3B meals for our communities 500M Pounds of surplus $1B in giving to $44.6M ZH I Z
Slide 8: 2022 Updated Full-Year Guidance
2022 Updated Full-Year Guidance Adjusted Metric* FY22 Guidance as of June 16, 2022 FY22 Guidance as of September 9, 2022 IDs (%) 2.5% - 3.5% 4.0% - 4.5% EPS ($) $3.85 - $3.95 $3.95 - $4.05 Operating Profit ($B) $4.3 - $4.4 $4.6 - $4.7 Tax Rate** 22% 22% Cap Ex ($B) $3.8 - $4.0 $3.4 - $3.6 Free Cash
Slide 9: Investment Thesis
Investment Thesis Leading Market Position Proven Value Strong Balance Sheet & with Exciting Growth Creation Model Resilient Free Cash Flow Opportunities(1) • 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%
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) SECOND QUARTER YEAR-TO-DATE 2022 2021 2022 2021 SALES $ 34,638 100.0% $ 31,682 100.0% $ 79,238 100.0% $ 72,980 100.0% OPERATING EXPENSES MERCHANDISE COSTS, INCLUDING ADVERTISING, WAREHOU
Slide 12: Consolidated Balance Sheets
Table 2. THE KROGER CO. CONSOLIDATED BALANCE SHEETS (in millions) (unaudited) August 13, August 14, 2022 2021 ASSETS Current Assets Cash $ 251 $ 339 Temporary cash investments 851 1,886 Store deposits in-transit 1,087 1,055 Receivables 1,869 1,961 Inventories 7,315 6,541 Prepaid and other current as
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 $ 1,397 $ 612 Adjustments to reconcile net earnings including noncontrolling interests to net cash prov
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