CINCINNATI, March 31, 2021 /PRNewswire/ -- The Kroger
Co. (NYSE: KR) will host a virtual 2021 Investor Day today to
provide an update on the company's strategic initiatives and plans
to deliver strong and sustainable total shareholder return of 8% –
11%.
"Kroger continues to deliver for customers through our seamless
ecosystem and relentless focus on freshness, value and
convenience," said Rodney McMullen,
Kroger's chairman and CEO. "Building upon the foundation
established by our Restock Kroger transformation, and
leveraging key learnings from operating during the pandemic, our
strategy of Leading With Fresh and Accelerating With Digital
is designed to convert our industry's near-term tailwinds into
long-term competitive advantages.
"Today, Kroger is uniquely positioned because of the strength of
our assets and our competitive moats cultivated over several years
of disciplined investment and focused execution. Our go-forward
strategy builds on these strengths to drive share growth, increase
profitability across digital, and deliver strong and sustainable
total shareholder returns. Our talented and energized team is
already delivering on our objectives, and we look forward to
continuing to position Kroger to win in a post-COVID world."
At today's Investor Day event, Kroger's leadership team will
discuss the three core elements of its strategy:
- Grow sales and share by leading with fresh food;
- Increase profitability by accelerating with digital, which is
now a growth engine; and
- Widen and deepen the competitive moats that will generate
customer loyalty and market share gains – Seamless,
Personalization, Fresh, and Our Brands.
Kroger's leadership team will outline key growth opportunities
that will drive the financial model forward including a clear path
to deliver total shareholder return between 8% - 11%, through net
earnings growth of 3% - 5% and strong and growing free cash flow to
invest in growth initiatives and return cash to shareholders.
"Kroger is delivering on its value creation model, and over the
period of 2019 to 2021, we expect to significantly exceed our total
shareholder return target," said Gary
Millerchip, Kroger's CFO. "The strength of our execution,
combined with our strategic plans to continue to lead in fresh,
accelerate digital, and grow alternative profit streams will enable
us to achieve our 2021 guidance and deliver profitable growth
beyond 2021."
Reconfirmed Full Year 2021 Guidance
|
IDs
(%)
|
EPS
($)
|
Operating
Profit ($B)
|
Tax
Rate**
|
Cap Ex
($B)
|
Free Cash
Flow ($B)****
|
Adjusted*
|
(3.0%) -
(5.0%)
|
$2.75 -
$2.95
|
$3.3 -
$3.5
|
23%
|
$3.4 -
$3.6
|
$1.6 -
$1.8
|
2-Year
Basis***
|
9.1% -
11.1%
(Stack)
|
12% - 16%
(CAGR)
|
5.4% - 8.5%
(CAGR)
|
|
|
$2.9 -
$3.0
(Average)
|
* Without adjusted items, if applicable; Identical sales is
without fuel; Operating profit represents FIFO Operating
Profit. Kroger is unable to provide a full reconciliation of
the GAAP and non-GAAP measures used in 2021 guidance without
unreasonable effort because it is not possible to predict certain
of our adjustment items with a reasonable degree of certainty. This
information is dependent upon future events and may be outside of
our control and its unavailability could have a significant impact
on 2021 GAAP financial results.
** This rate reflects typical tax adjustments and does not reflect
changes to the rate from the completion of income tax audit
examinations, which cannot be predicted.
*** Identical sales, without fuel, guidance for 2-year basis
represents the sum of actual 2020 identical sales and 2021
guidance. The 2-year basis guidance items denoted with CAGR
represent the compounded annual growth rate utilizing 2019 as the
base year. Average free cash flow is the average of actual
2020 free cash flow and 2021 guidance.
**** 2021 free cash flow guidance includes a $300M payment of deferred payroll taxes. This
excludes planned payments related to the restructuring of
multi-employer pension plans.
Investor Webcast Details
The presentation will
broadcast online at ir.kroger.com on March 31 from
9:00 a.m. (ET) to approximately
12:00 p.m. (ET). Click on Events
& Presentations to access the event. An on-demand replay
of the presentations will be available starting at approximately
5:00 p.m. (ET) on Thursday, April 1,
2021.
About The Kroger Co.
At The Kroger Co. (NYSE: KR), we
are Fresh for Everyone™ and dedicated to our Purpose: To Feed the
Human Spirit®. We are, across our family of companies, nearly half
a million associates who serve 60 million households annually
through a seamless shopping experience under a variety of banner
names. We are committed to creating #ZeroHungerZeroWaste
communities by 2025. To learn more about us, visit our newsroom and
investor relations site.
Please refer to the supplemental information presented in the
tables for reconciliations of the non-GAAP financial measures used
in this press release to the most comparable GAAP financial measure
and related disclosure.
This press release contains certain statements that constitute
"forward-looking statements" about the future performance of the
company. These statements are based on management's assumptions and
beliefs in light of the information currently available to it. Such
statements are indicated by words or phrases such as "achieve,"
"believe," "contemplates," "continue," "deliver," "expect,"
"future," "guidance," "strategy," "target," "trends," and "will."
Various uncertainties and other factors could cause actual results
to differ materially from those contained in the forward-looking
statements. These include the specific risk factors identified in
"Risk Factors" in our annual report on Form 10-K for our last
fiscal year and any subsequent filings, as well as the
following:
- Kroger's ability to achieve sales, earnings, incremental FIFO
operating profit, and adjusted free cash flow goals may be
affected by: COVID-19 related factors, risks and challenges,
including among others, the length of time that the pandemic
continues, the temporary inability of customers to shop due to
illness, quarantine, or other travel restrictions or financial
hardship, shifts in demand away from discretionary or higher priced
products to lower priced products, or stockpiling or similar
pantry-filling activities, reduced workforces which may be caused
by, but not limited to, the temporary inability of the workforce to
work due to illness, quarantine, or government mandates, temporary
store closures due to reduced workforces or government mandates, or
the availability and efficacy of a vaccine; labor negotiations or
disputes; changes in the types and numbers of businesses that
compete with Kroger; pricing and promotional activities of existing
and new competitors, including non-traditional competitors, and the
aggressiveness of that competition; Kroger's response to these
actions; the state of the economy, including interest rates, the
inflationary and deflationary trends in certain commodities,
changes in tariffs, and the unemployment rate; the effect that fuel
costs have on consumer spending; volatility of fuel margins;
changes in government-funded benefit programs and the extent and
effectiveness of any COVID-19 stimulus packages; manufacturing
commodity costs; diesel fuel costs related to Kroger's logistics
operations; trends in consumer spending; the extent to which
Kroger's customers exercise caution in their purchasing in response
to economic conditions; the uncertainty of economic growth or
recession; changes in inflation or deflation in product and
operating costs; stock repurchases; Kroger's ability to retain
pharmacy sales from third party payors; consolidation in the
healthcare industry, including pharmacy benefit managers; Kroger's
ability to negotiate modifications to multi-employer pension plans;
natural disasters or adverse weather conditions; the effect of
public health crises or other significant catastrophic events,
including the coronavirus; the potential costs and risks associated
with potential cyber-attacks or data security breaches; the success
of Kroger's future growth plans; the ability to execute our growth
strategy and value creation model, including continued cost
savings, growth of our alternative profit businesses, and widening
and deepening our strategic moats of fresh, our brands,
personalization, and seamless; and the successful integration of
merged companies and new partnerships. Our ability to achieve these
goals may also be affected by our ability to manage the factors
identified above. Our ability to execute our financial strategy may
be affected by our ability to generate cash flow.
- Kroger's effective tax rate may differ from the expected rate
due to changes in laws, the status of pending items with various
taxing authorities, and the deductibility of certain expenses.
Kroger assumes no obligation to update the information contained
herein. Please refer to Kroger's reports and filings with the
Securities and Exchange Commission for a further discussion of
these risks and uncertainties.
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SOURCE The Kroger Co.