CINCINNATI, June 17, 2021 /PRNewswire/ -- The Kroger Co.
(NYSE: KR) today reported its first quarter 2021 results and will
update investors on how Leading with Fresh and Accelerating with
Digital initiatives are positioning Kroger for long-term
sustainable growth.
Comments from Chairman and CEO Rodney
McMullen
"Kroger is even better positioned to connect with our customers
than we were prior to the pandemic as a result of our relentless
focus on leading with fresh and accelerating with digital. I am
incredibly proud of our amazing associates who continue to be there
for our customers, communities, and each other when they need us
most and who strive to deliver a full, fresh, and friendly
experience to every customer, every time.
"Kroger's strong execution delivered identical sales results in
the first quarter that exceeded our original expectations.
Customers are responding to the investments we have made in
digital, as evidenced by our triple-digit growth in digital sales
since the beginning of 2019. We were disciplined in driving costs
out of the business and we achieved record growth in Kroger's
alternative profit business, demonstrating the power and
attractiveness of our long-term model.
"We are raising our guidance based on the strength of our
results and we remain confident in our ability to deliver
consistently attractive total shareholder return."
First Quarter Financial Results
|
1Q21 ($ in
millions; except EPS)
|
1Q20 ($ in
millions; except EPS)
|
ID Sales* (Table
4)
|
(4.1%)
|
19.0%
|
EPS
|
$0.18
|
$1.52
|
Adjusted EPS
(Table 6)
|
$1.19
|
$1.22
|
Operating
Profit
|
$805
|
$1,326
|
Adjusted FIFO
Operating Profit (Table 7)
|
$1,375
|
$1,453
|
FIFO Gross Margin
Rate*
|
Decreased 65 basis
points
|
OG&A
Rate*
|
Decreased 108
basis points
|
*without fuel and adjustment items, if applicable
First Quarter Results versus Two Years Ago
|
1Q21 ($ in
millions; except EPS)
|
ID Sales Two Year
Stacked* (Table 8)
|
14.9%
|
EPS Two Year CAGR
(Table 8)
|
(56.5%)
|
Adjusted EPS Two
Year CAGR (Table 8)
|
28.6%
|
Operating Profit
Two Year CAGR (Table 8)
|
(5.5%)
|
Adjusted FIFO
Operating Profit Two Year CAGR (Table 8)
|
19.9%
|
FIFO Gross Margin
Rate Compared to Q1 2019*
|
Decreased 21 basis
points
|
OG&A Rate
Compared to Q1 2019*
|
Decreased 58 basis
points
|
*without fuel and adjustment items, if applicable
Total company sales were $41.3
billion in the first quarter, compared to $41.5 billion for the same period last year.
Excluding fuel, sales decreased 4.0% compared to the same period
last year.
Gross margin was 22.6% of sales for the first quarter. The FIFO
gross margin rate, excluding fuel, decreased 65 basis points
compared to the same period last year. This decrease was primarily
related to sales deleverage, higher shrink, continued price
investments, and charges related to COVID-19, partially offset by
sourcing benefits and growth in Alternative Profits.
The LIFO charge for the quarter was $37
million, compared to a LIFO charge of $31 million for the same period last year.
The Operating, General & Administrative rate decreased 108
basis points, excluding fuel and adjustment items, which reflects
decreased COVID-19 related costs, lower contributions to
multi-employer pension plans, the execution of cost savings
initiatives and decreased incentive costs, partially offset by
sales deleverage.
Rent and depreciation rate, excluding fuel, increased 18 basis
points due to sales deleverage.
Capital Allocation Strategy
Kroger continues to generate strong free cash flow and remains
committed to investing in the business to drive long-term
sustainable net earnings growth, maintaining its current investment
grade debt rating, and returning excess free cash flow to
shareholders via share repurchase and a growing dividend over
time.
As previously disclosed, Fred
Meyer and QFC and four local unions ratified an agreement
for the transfer of liabilities from the Sound Retirement
Trust to the UFCW Consolidated Pension Plan. Kroger will transfer
$449 million in net accrued pension
liabilities and prepaid escrow funds, on a pre-tax basis, to
fulfill obligations for past service for associates and retirees.
On an after-tax basis, $344 million
will be needed to execute this transaction. The agreement will be
satisfied by cash installment payments to the UFCW Consolidated
Pension Plan and are expected to be paid evenly over seven years.
The impact of this transaction on GAAP net earnings per diluted
share was $0.45 during the quarter
and is excluded from adjusted net earnings per diluted share
results.
Kroger's net total debt to adjusted EBITDA ratio is 1.79,
compared to 1.81 a year ago (Table 5). The company's net total debt
to adjusted EBITDA ratio target range is 2.30 to 2.50.
Kroger also announced today that the company's Board of
Directors has approved a $1 billion
share repurchase program; the previous authorization expired last
week.
2021 Guidance
Comments from CFO Gary
Millerchip
"Based on the momentum within our business, we are raising our
full year guidance. We now expect our two-year identical sales
stack to be in the range of 10.1% to 11.6%. We expect our adjusted
net earnings per diluted share to be in the range of $2.95 to $3.10.
"Our new, $1 billion share buyback
program reinforces our Board of Directors and management's
confidence in our ability to generate strong free cash flow and is
consistent with our commitment to deliver strong and sustainable
total shareholder returns of 8-11%."
Full Year 2021 Guidance
|
IDs
(%)
|
EPS
($)
|
Operating
Profit ($B)
|
Tax
Rate**
|
Cap Ex
($B)
|
Free Cash
Flow ($B)****
|
Adjusted*
|
(4.0%) -
(2.5%)
|
$2.95 -
$3.10
|
$3.5 -
$3.7
|
23%
|
$3.4 -
$3.6
|
$1.8 -
$2.0
|
2-Year
Basis***
|
10.1% -
11.6%
(Stack)
|
16% - 19%
(CAGR)
|
8.5% - 10.8%
(CAGR)
|
|
|
$3.0 -
$3.1
(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 or changes in tax laws, which cannot be predicted.
*** Identical sales, without fuel, guidance for 2-year basis
represents the sum of actual 2020 identical sales percentage and
2021 identical sales rate 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.
First Quarter 2021 Highlights
Leading with Fresh
- Our Brands launched 253 new items during the quarter,
including seasonal fresh produce and products to elevate summer
cooking
- Announced expansion of partnership with 80 Acres Farms to 316
stores reaching more shoppers in the Midwest – both in store and
online
- Announced Go Fresh &
Local Supplier Accelerator, providing Kroger with the
opportunity to discover more local and regional suppliers to
partner with to advance freshness, quality, and Fresh for
Everyone commitment
- Launched a digital farmers market pilot, creating an e-commerce
marketplace that connects local farmers and businesses to customers
seeking fresh and delicious products
Accelerating with Digital
- Opened first two Kroger Delivery facilities powered by Ocado in
Monroe, Ohio and Groveland, Florida, a new geography
- Expanded to 2,233 Pickup locations and 2,488 Delivery
locations, covering 98% of Kroger households
- Increased capacity for Pickup by 15% with focus on adding
high-demand time slots
- Named "Retail Innovator of the Year" during the Path to
Purchase Institute's first Industry Innovator Awards
- Announced Kroger Drone Delivery pilot with partner Drone
Express, reinforcing the importance of flexibility and immediacy to
customers
Associate Experience
- On track to increase Kroger Family of Companies' average hourly
wage to $16 an hour and with
comprehensive benefits, will be approaching $21 by the end of 2021
- Reached agreement with four local unions to restructure the
Sound Retirement Trust and improve security and stability of future
pension benefits for more than 10,600 Kroger Family of Companies
associates
- Continued to encourage associates to get the COVID-19 vaccine,
offering a one-time $100
incentive
- On June 10, held first nationwide
hybrid hiring event, featuring virtual and in-store interviews,
driving a 37% applicant flow increase
- Since inception, 6,314 associates have taken advantage of
Kroger's best-in-class education assistance program, 84% of whom
are hourly
- Observed Mental Health Awareness Month by elevating the mental
health discussion internally through a variety of communications,
resources, and live webinars
- Published LGBTQ+ and Asian American Pacific Islander allyship
guides as part of Framework for Action: Diversity, Equity &
Inclusion plan and to uplift customers and associates across
the Kroger Family of Companies
- 47 female associates were chosen from across the Kroger
enterprise by Progressive Grocer to represent the Top Women in
Grocery across three categories including, Senior-level Executives,
Rising Stars and Store Leaders
- Announced a donation of $1
million to seed the Roundy's Oconomowoc Distribution Center
Victims and Survivor's Fund and a donation of $1 million to the Colorado Healing Fund to
support the needs of victims, families, survivors and the community
affected by the recent Boulder, CO
supermarket tragedy, from The Kroger Co. Foundation
Live Our Purpose
- Providing the chance to win one of five $1 million checks or one of 50
groceries-for-a-year prizes through the Community Immunity Giveaway
to help support the Biden Administration's goal to have 70% of U.S.
adults vaccinated by July 4
- Kroger Health administered more than 5 million COVID-19
vaccines to date, including customers and associates
- 2020 Zero Hunger | Zero Waste directed $213 million of $301
million in total charitable giving to help end hunger in
communities, and a record one-year total of 640 million meals to
people across the country while achieving 81% waste diversion from
landfills company-wide
- Zero Hunger | Zero Waste Foundation announced the second cohort
of its Innovation Fund, selecting 10 startups to receive a combined
$2.5M in funding to launch innovative
new consumer products made with surplus food or food byproducts and
technologies to advance the upcycled food industry
- Purchased $4.1 billion from
diverse suppliers during 2020, an increase of 21% versus a year ago
and advancement of commitment to reach $10
billion in diverse supplier spend by 2030
- Supported disaster response to uplift communities affected by
the Texas winter storm by
providing aid, including issuing $270,000 in Helping Hands Fund emergency grants
to more than 500 associates, partnering with the City of Dallas and City of Houston, and supplying drinkable water
to local communities and not-for-profit organizations
- Launched free and downloadable Small Business Resource Guide to
encourage supplier diversity as part of Framework for Action:
Diversity, Equity & Inclusion plan
About Kroger
At The Kroger Co. (NYSE: KR),
we are dedicated to our Purpose: to Feed the Human Spirit™. We are,
across our family of companies nearly half a million associates who
serve over nine million customers daily through a seamless digital
shopping experience and 2,800 retail food stores under a variety
of banner names, serving America through food inspiration and
uplift, and creating #ZeroHungerZeroWaste communities by 2025. To
learn more about us, visit our newsroom and investor
relations site.
Kroger's first quarter 2021 ended on May 22, 2021.
Note: Fuel sales have historically had a low gross margin rate
and operating expense rate as compared to corresponding rates on
non-fuel sales. As a result, Kroger discusses the changes in these
rates excluding the effect of fuel.
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 pandemic related factors, risks and challenges,
including among others, the length of time that the pandemic
continues, new variants of the virus, the effect of the easing of
restrictions, lack of access to vaccines for certain populations
and the extent of vaccine aversion, the potential for future spikes
in infection and illness rates and the corresponding potential for
disruptions in workforce availability and customer shopping
patterns, re-imposed restrictions in the event of resurgence, and
interruptions in the global supply chain or capacity constraints;
the pace of recovery when the pandemic subsides; labor negotiations
or disputes; changes in the unemployment rate; pressures in the
labor market; changes in government-funded benefit programs and the
extent and effectiveness of any COVID-19 stimulus packages; 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; the
effect that fuel costs have on consumer spending; volatility of
fuel margins; 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 tax 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 unless required by applicable law. Please refer to Kroger's
reports and filings with the Securities and Exchange Commission for
a further discussion of these risks and uncertainties.
Note: Kroger's quarterly conference call with investors will
broadcast live at 10 a.m. (ET) on
June 17, 2021 at ir.kroger.com.
An on-demand replay of the webcast will be available at
approximately 1 p.m. (ET) on Thursday, June
17, 2021.
1st Quarter 2021 Tables Include:
- Consolidated Statements of Operations
- Consolidated Balance Sheets
- Consolidated Statements of Cash Flows
- Supplemental Sales Information
- Reconciliation of Net Total Debt and Net Earnings Attributable
to The Kroger Co. to Adjusted EBITDA
- Net Earnings Per Diluted Share Excluding the Adjustment
Items
- Operating Profit Excluding the Adjustment Items
- Two-Year Financial Results
Table
1.
|
THE KROGER
CO.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(in millions, except
per share amounts)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALES
|
|
|
|
|
$
41,298
|
|
100.0%
|
|
$ 41,549
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MERCHANDISE COSTS,
INCLUDING ADVERTISING,
|
|
|
|
|
|
|
|
|
|
|
|
|
WAREHOUSING AND
TRANSPORTATION (a),
|
|
|
|
|
|
|
|
|
|
|
|
|
AND LIFO CHARGE
(b)
|
|
|
31,947
|
|
77.4
|
|
31,454
|
|
75.7
|
|
|
|
OPERATING, GENERAL
AND ADMINISTRATIVE (a)
|
|
7,424
|
|
18.0
|
|
7,671
|
|
18.5
|
|
|
|
RENT
|
|
|
|
|
261
|
|
0.6
|
|
273
|
|
0.7
|
|
|
|
DEPRECIATION AND
AMORTIZATION
|
|
|
861
|
|
2.1
|
|
825
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
PROFIT
|
|
|
|
805
|
|
2.0
|
|
1,326
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST
EXPENSE
|
|
|
|
(165)
|
|
(0.4)
|
|
(174)
|
|
(0.4)
|
|
|
|
NON-SERVICE COMPONENT
OF COMPANY-SPONSORED
|
|
|
|
|
|
|
|
|
|
|
|
|
PENSION PLAN
COSTS
|
|
|
18
|
|
-
|
|
11
|
|
-
|
|
|
|
(LOSS) GAIN ON
INVESTMENTS
|
|
|
(479)
|
|
(1.2)
|
|
422
|
|
1.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS BEFORE
INCOME TAX EXPENSE
|
|
179
|
|
0.4
|
|
1,585
|
|
3.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME TAX
EXPENSE
|
|
|
36
|
|
0.1
|
|
373
|
|
0.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
INCLUDING NONCONTROLLING INTERESTS
|
143
|
|
0.4
|
|
1,212
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONCONTROLLING
INTERESTS
|
|
|
3
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO.
|
|
$
140
|
|
0.3%
|
|
$
1,212
|
|
2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER BASIC COMMON
SHARE
|
|
|
$
0.18
|
|
|
|
$
1.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE NUMBER
OF COMMON SHARES USED IN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
CALCULATION
|
|
|
752
|
|
|
|
780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER DILUTED COMMON
SHARE
|
|
|
$
0.18
|
|
|
|
$
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE NUMBER OF
COMMON SHARES USED IN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED
CALCULATION
|
|
|
760
|
|
|
|
788
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS DECLARED
PER COMMON SHARE
|
|
$
0.18
|
|
|
|
$
0.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
Certain percentages
may not sum due to rounding.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
The Company defines
First-In First-Out (FIFO) gross profit as sales minus merchandise
costs, including advertising, warehousing and transportation,
but excluding the Last-In First-Out (LIFO) charge.
|
|
|
|
|
|
The Company defines
FIFO gross margin as FIFO gross profit divided by sales.
|
|
|
The Company defines
FIFO operating profit as operating profit excluding the LIFO
charge.
|
|
|
The Company defines
FIFO operating margin as FIFO operating profit divided by
sales.
|
|
|
The above FIFO
financial metrics are important measures used by management to
evaluate operational effectiveness. Management believes these
FIFO financial metrics are useful to investors and analysts because
they measure our day-to-day operational effectiveness.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Merchandise costs
("COGS") and operating, general and administrative expenses
("OG&A") exclude depreciation and amortization expense and rent
expense which are included in separate expense lines.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
LIFO charges of $37
and $31 were recorded in the first quarters of 2021 and 2020,
respectively.
|
|
Table
2.
|
THE KROGER
CO.
|
CONSOLIDATED
BALANCE SHEETS
|
(in
millions)
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 22,
|
|
May 23,
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
$
360
|
|
$
425
|
|
|
Temporary cash
investments
|
|
|
1,949
|
|
2,301
|
|
|
Store deposits
in-transit
|
|
|
|
1,011
|
|
1,142
|
|
|
Receivables
|
|
|
|
|
1,936
|
|
1,552
|
|
|
Inventories
|
|
|
|
|
6,767
|
|
6,297
|
|
|
Prepaid and other
current assets
|
|
|
522
|
|
458
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
|
12,545
|
|
12,175
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
23,057
|
|
21,790
|
|
Operating lease
assets
|
|
|
|
6,663
|
|
6,831
|
|
Intangibles,
net
|
|
|
|
|
978
|
|
1,044
|
|
Goodwill
|
|
|
|
|
3,076
|
|
3,076
|
|
Other
assets
|
|
|
|
|
2,492
|
|
2,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
|
|
|
$
48,811
|
|
$
46,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREOWNERS' EQUITY
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
Current portion of
long-term debt including obligations
|
|
|
|
|
|
|
under finance
leases
|
|
|
|
$
1,150
|
|
$
1,095
|
|
|
Current portion of
operating lease liabilities
|
|
644
|
|
669
|
|
|
Trade accounts
payable
|
|
|
|
7,015
|
|
7,132
|
|
|
Accrued salaries and
wages
|
|
|
1,165
|
|
1,302
|
|
|
Other current
liabilities
|
|
|
|
5,236
|
|
4,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
|
15,210
|
|
14,671
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
including obligations under finance leases
|
12,974
|
|
12,376
|
|
Noncurrent operating
lease liabilities
|
|
|
6,385
|
|
6,503
|
|
Deferred income
taxes
|
|
|
|
1,541
|
|
1,532
|
|
Pension and
postretirement benefit obligations
|
|
507
|
|
591
|
|
Other long-term
liabilities
|
|
|
|
2,965
|
|
1,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
|
39,582
|
|
37,614
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareowners'
equity
|
|
|
|
|
9,229
|
|
9,328
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and
Shareowners' Equity
|
|
$
48,811
|
|
$
46,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total common shares
outstanding at end of period
|
|
748
|
|
778
|
|
Total diluted shares
year-to-date
|
|
|
760
|
|
788
|
|
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
|
|
$
143
|
|
$
1,212
|
|
|
Adjustments to
reconcile net earnings including noncontrolling
|
|
|
|
|
|
|
|
interests to net cash
provided by operating activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
861
|
|
825
|
|
|
|
|
Operating lease asset
amortization
|
|
191
|
|
193
|
|
|
|
|
LIFO
charge
|
|
|
|
37
|
|
31
|
|
|
|
|
Stock-based employee
compensation
|
|
56
|
|
63
|
|
|
|
|
Company-sponsored
pension plans
|
|
(14)
|
|
(5)
|
|
|
|
|
Deferred income
taxes
|
|
|
(2)
|
|
76
|
|
|
|
|
Loss (gain) on the
sale of assets
|
|
|
9
|
|
(12)
|
|
|
|
|
Loss (gain) on
investments
|
|
|
479
|
|
(422)
|
|
|
|
|
Other
|
|
|
|
100
|
|
108
|
|
|
|
|
Changes in operating
assets and liabilities, net
|
|
|
|
|
|
|
|
|
|
of effects from
mergers and disposals of businesses:
|
|
|
|
|
|
|
|
|
|
|
Store deposits
in-transit
|
|
|
84
|
|
37
|
|
|
|
|
|
|
Receivables
|
|
|
14
|
|
90
|
|
|
|
|
|
|
Inventories
|
|
|
205
|
|
756
|
|
|
|
|
|
|
Prepaid and other
current assets
|
|
369
|
|
63
|
|
|
|
|
|
|
Trade accounts
payable
|
|
|
341
|
|
783
|
|
|
|
|
|
|
Accrued
expenses
|
|
|
(548)
|
|
167
|
|
|
|
|
|
|
Income taxes
receivable and payable
|
|
(175)
|
|
276
|
|
|
|
|
|
|
Operating lease
liabilities
|
|
|
(214)
|
|
(141)
|
|
|
|
|
|
|
Other
|
|
|
|
320
|
|
145
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
2,256
|
|
4,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Payments for property
and equipment, including payments for lease buyouts
|
|
(820)
|
|
(698)
|
|
|
Proceeds from sale of
assets
|
|
|
7
|
|
35
|
|
|
Other
|
|
|
|
|
|
(40)
|
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used by
investing activities
|
|
|
(853)
|
|
(689)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Proceeds from
issuance of long-term debt
|
|
-
|
|
504
|
|
|
Payments on long-term
debt including obligations under finance leases
|
|
(328)
|
|
(14)
|
|
|
Net payments on
commercial paper
|
|
|
-
|
|
(1,150)
|
|
|
Dividends
paid
|
|
|
|
(138)
|
|
(128)
|
|
|
Proceeds from
issuance of capital stock
|
|
31
|
|
57
|
|
|
Treasury stock
purchases
|
|
|
(402)
|
|
(422)
|
|
|
Proceeds from
financing arrangement
|
|
|
166
|
|
-
|
|
|
Other
|
|
|
|
|
|
(110)
|
|
(76)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used by
financing activities
|
|
|
(781)
|
|
(1,229)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCREASE IN CASH
AND TEMPORARY
|
|
|
|
|
|
|
CASH
INVESTMENTS
|
|
|
622
|
|
2,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH AND TEMPORARY
CASH INVESTMENTS:
|
|
|
|
|
|
|
BEGINNING OF
YEAR
|
|
|
1,687
|
|
399
|
|
|
END OF
PERIOD
|
|
|
|
$
2,309
|
|
$
2,726
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
capital investments:
|
|
|
|
|
|
|
|
Payments for property
and equipment, including payments for lease buyouts
|
|
$
(820)
|
|
$
(698)
|
|
|
Payments for lease
buyouts
|
|
|
-
|
|
5
|
|
|
Changes in
construction-in-progress payables
|
|
154
|
|
(62)
|
|
|
|
Total capital
investments, excluding lease buyouts
|
|
$
(666)
|
|
$
(755)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disclosure of cash
flow information:
|
|
|
|
|
|
|
|
|
Cash paid during the
year for interest
|
|
$
185
|
|
$
188
|
|
|
|
Cash paid during the
year for income taxes
|
|
$
205
|
|
$
18
|
|
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 with Kroger's financial results reported in accordance
with GAAP. Other companies in our industry may calculate
identical sales differently than Kroger does, limiting the
comparability of the measure.
|
|
|
|
|
|
|
|
|
|
|
IDENTICAL SALES
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
EXCLUDING
FUEL
|
|
$
36,608
|
|
$
38,186
|
|
|
|
|
|
|
|
|
|
EXCLUDING
FUEL
|
|
(4.1)%
|
|
19.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Kroger defines
identical sales, excluding fuel, as sales to retail customers,
including sales from all departments at identical supermarket
locations, Kroger Specialty Pharmacy businesses, jewelry and
ship-to-home solutions. Kroger defines a supermarket as
identical when it has been in operation without expansion or
relocation for five full quarters.
|
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
adjusted EBITDA is an important measure used by management to
evaluate the Company's access to liquidity. The items below
should be reviewed in conjunction with Kroger's financial results
reported in accordance with GAAP.
|
|
|
|
|
|
|
|
|
The following table
provides a reconciliation of net total debt.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 22,
|
|
May 23,
|
|
|
|
|
2021
|
|
2020
|
|
Change
|
|
|
|
|
|
|
|
Current portion of
long-term debt including obligations
|
|
|
|
|
|
|
under
finance leases
|
|
$
1,150
|
|
$
1,095
|
|
$
55
|
Long-term debt
including obligations under finance leases
|
|
12,974
|
|
12,376
|
|
598
|
|
|
|
|
|
|
|
Total debt
|
|
14,124
|
|
13,471
|
|
653
|
|
|
|
|
|
|
|
Less: Temporary cash
investments
|
|
1,949
|
|
2,301
|
|
(352)
|
|
|
|
|
|
|
|
Net total debt
|
|
$
12,175
|
|
$
11,170
|
|
$
1,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
provides a reconciliation from net earnings attributable to The
Kroger Co. to adjusted EBITDA, as defined
in the Company's credit agreement, on a rolling four quarter
basis.
|
|
|
|
|
|
|
|
|
|
Rolling Four Quarters
Ended
|
|
|
|
|
May 22,
|
|
May 23,
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to The Kroger Co.
|
|
$
1,513
|
|
$
2,099
|
|
|
LIFO (credit)
charge
|
|
(1)
|
|
121
|
|
|
Depreciation and
amortization
|
|
2,783
|
|
2,695
|
|
|
Interest
expense
|
|
535
|
|
580
|
|
|
Income tax
expense
|
|
445
|
|
616
|
|
|
Adjustment for
pension plan withdrawal liabilities
|
|
1,437
|
|
76
|
|
|
Adjustment for gain
on investments
|
|
(204)
|
|
(473)
|
|
|
Adjustment for Home
Chef contingent consideration
|
|
172
|
|
15
|
|
|
Adjustment for
severance charge and related benefits
|
|
-
|
|
80
|
|
|
Adjustment for
deconsolidation and impairment of Lucky's Market
|
|
|
|
|
|
|
attributable to The
Kroger Co. (a)
|
|
-
|
|
305
|
|
|
Adjustment for
transformation costs (b)
|
|
117
|
|
90
|
|
|
Other
|
|
(6)
|
|
(21)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
6,791
|
|
$
6,183
|
|
|
|
|
|
|
|
|
|
Net total debt to
adjusted EBITDA ratio
|
|
1.79
|
|
1.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The adjustment
for impairment of Lucky's Market attributable to The Kroger Co.
excludes a $107 net loss attributable
to the minority interest of Lucky's
Market.
|
|
|
|
|
|
|
|
|
|
(b) Transformation
costs primarily include costs related to store and business closure
costs and third party professional
consulting fees associated with
business transformation and cost saving initiatives.
|
|
|
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 certain items described below.
Adjusted net earnings and adjusted net earnings per diluted share
are useful metrics to investors and analysts because they present
more accurately year-over-year comparisons for net earnings and net
earnings per diluted share because adjusted items are not the
result of normal operations. Items identified in this table
should not be considered alternatives to net earnings attributable
to The Kroger Co. or any other GAAP measure of performance.
These items should not be reviewed in isolation or considered
substitutes for the Company's financial results as reported in
accordance with GAAP. Due to the nature of these items, as
further described below, it is important to identify these items
and to review them in conjunction with the Company's financial
results reported in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
summarizes items that affected the Company's financial results
during the periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO.
|
|
$
140
|
|
$
1,212
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTMENT FOR
PENSION PLAN WITHDRAWAL LIABILITIES (a)(b)
|
|
344
|
|
-
|
|
ADJUSTMENT FOR LOSS
(GAIN) ON INVESTMENTS (a)(c)
|
|
367
|
|
(312)
|
|
ADJUSTMENT FOR HOME
CHEF CONTINGENT CONSIDERATION (a)(d)
|
|
33
|
|
44
|
|
ADJUSTMENT FOR
TRANSFORMATION COSTS (a)(e)
|
|
34
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
2021 AND 2020
ADJUSTMENT ITEMS
|
|
|
778
|
|
(240)
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO.
|
|
|
|
|
|
|
EXCLUDING THE
ADJUSTMENT ITEMS ABOVE
|
|
$
918
|
|
$
972
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO.
|
|
|
|
|
|
|
PER DILUTED COMMON
SHARE
|
|
|
$
0.18
|
|
$
1.52
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTMENT FOR
PENSION PLAN WITHDRAWAL LIABILITIES (f)
|
|
0.45
|
|
-
|
|
ADJUSTMENT FOR LOSS
(GAIN) ON INVESTMENTS (f)
|
|
0.48
|
|
(0.40)
|
|
ADJUSTMENT FOR HOME
CHEF CONTINGENT CONSIDERATION (f)
|
|
0.04
|
|
0.06
|
|
ADJUSTMENT FOR
TRANSFORMATION COSTS (f)
|
|
0.04
|
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
2021 AND 2020
ADJUSTMENT ITEMS
|
|
|
1.01
|
|
(0.30)
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO THE KROGER CO. PER
|
|
|
|
|
|
|
DILUTED COMMON SHARE
EXCLUDING THE ADJUSTMENT ITEMS ABOVE
|
|
$
1.19
|
|
$
1.22
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE NUMBER OF
COMMON SHARES USED IN
|
|
|
|
|
|
|
DILUTED
CALCULATION
|
|
|
760
|
|
788
|
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
adjustment to OG&A expenses for pension plan withdrawal
liabilities was $449.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
The pre-tax
adjustments for (gain) loss on investments were $479 and ($422) in
the first quarters of 2021 and 2020,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
The pre-tax
adjustments to OG&A expenses for Home Chef contingent
consideration were $43 and $60 in the first quarters of 2021 and
2020, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
The pre-tax
adjustment to OG&A expenses for transformation costs was $44
and $38 in the first quarters of 2021 and 2020, respectively.
Transformation costs primarily include costs related to store and
business closure costs and third party professional consulting fees
associated with business transformation and cost saving
initiatives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(f)
|
The amounts presented
represent the net earnings (loss) per diluted common share effect
of each adjustment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
2021 First Quarter
Adjustment Items include adjustments for pension plan withdrawal
liabilities, loss on investments, Home Chef contingent
consideration adjustment and strategic transformation
costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020 First Quarter
Adjustment Items include adjustments for the gain on investments,
Home Chef contingent consideration adjustment and strategic
transformation costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
profit is a useful metric to investors and analysts because it
presents more accurately year-over year comparisons for operating
profit because adjusted items are not the result of normal
operations. Items identified in this table should not be
considered alternatives to operating profit or any other GAAP
measure of performance. These items should not be reviewed in
isolation or considered substitutes for the Company's financial
results as reported in accordance with GAAP. Due to the
nature of these items, as further described below, it is important
to identify these items and to review them in conjunction with the
Company's financial results reported in accordance with
GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
summarizes items that affected the Company's financial results
during the periods presented.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
$
805
|
|
$
1,326
|
|
LIFO
charge
|
|
|
|
37
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
FIFO Operating
profit
|
|
|
842
|
|
1,357
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for
pension plan withdrawal liabilities
|
|
449
|
|
-
|
|
Adjustment for Home
Chef contingent consideration
|
|
43
|
|
60
|
|
Adjustment for
transformation costs (a)
|
|
44
|
|
38
|
|
Other
|
|
|
|
|
(3)
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
2021 and 2020
Adjustment items
|
|
533
|
|
96
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FIFO
operating profit
|
|
|
|
|
|
|
|
excluding the
adjustment items above
|
|
$
1,375
|
|
$
1,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Transformation costs
primarily include costs related to store and business closure costs
and third party professional consulting fees
associated with business transformation and cost saving
initiatives.
|
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 per
diluted share, due to the significant fluctuations that occurred
during 2020 as a result of the COVID-19 pandemic. Two-year
financial results for identical sales without fuel, adjusted
operating profit and adjusted net earnings per diluted share are
useful metrics to investors and analysts because it presents more
accurate comparisons of results and trends over a longer period of
time to demonstrate the effect of COVID-19 on our results.
Items identified in these tables should not be considered
alternatives to any other GAAP measure of performance. These
items should not be reviewed in isolation or considered substitutes
for the Company's financial results as reported in accordance with
GAAP. Due to the nature of these items, as further described
below, it is important to identify these items and to review them
in conjunction with the Company's financial results reported in
accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
IDENTICAL SALES
TWO-YEAR STACKED
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2020
|
|
|
|
|
FIRST
QUARTER
|
|
FIRST
QUARTER
|
|
|
|
|
2021
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding
Fuel
|
|
$
36,608
|
|
$ 38,186
|
|
$ 38,137
|
|
$
32,046
|
|
|
|
|
|
|
|
|
|
|
|
Excluding
Fuel
|
|
(4.1)%
|
|
|
|
19.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-year identical
sales stacked
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING PROFIT
EXCLUDING THE ADJUSTMENT ITEMS TWO-YEAR CAGR*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
|
2021
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
|
|
|
|
$
805
|
|
$
901
|
|
LIFO
charge
|
|
|
|
|
|
37
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
|
FIFO Operating
profit
|
|
|
|
|
|
842
|
|
916
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for
pension plan withdrawal liabilities
|
|
|
|
|
|
449
|
|
59
|
|
Adjustment for Home
Chef contingent consideration
|
|
|
|
|
|
43
|
|
(24)
|
|
Adjustment for
transformation costs (a)
|
|
|
|
|
|
44
|
|
-
|
|
Other
|
|
|
|
|
|
(3)
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 and 2019
Adjustment items
|
|
|
|
|
|
533
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted FIFO
operating profit
|
|
|
|
|
|
|
|
|
|
|
excluding the
adjustment items above
|
|
|
|
|
|
$
1,375
|
|
$
957
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-year operating
profit CAGR*
|
|
|
|
|
|
(5.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-year adjusted
FIFO operating profit
|
|
|
|
|
|
|
|
|
|
|
excluding the
adjustment items above CAGR*
|
|
|
|
|
|
19.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Transformation costs
primarily include costs related to store and business closure costs
and third party professional consulting fees associated with
business transformation and cost saving initiatives.
|
|
|
|
|
|
|
|
|
|
|
|
*
|
CAGR represents the
compounded annual growth rate.
|
|
|
|
|
|
|
|
|
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*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to the Kroger Co.
|
|
|
|
|
|
$
140
|
|
$
772
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for
pension plan withdrawal liabilities (a)(b)
|
|
|
|
|
|
344
|
|
44
|
|
|
|
Adjustment for gain
on sale of Turkey Hill Dairy (a)(c)
|
|
|
|
|
|
-
|
|
(80)
|
|
|
|
Adjustment for gain
on sale of You Technology (a)(d)
|
|
|
|
|
|
-
|
|
(52)
|
|
|
|
Adjustment for loss
(gain) on investments (a)(e)
|
|
|
|
|
|
367
|
|
(80)
|
|
|
|
Adjustment for Home
Chef contingent consideration (a)(f)
|
|
|
|
|
|
33
|
|
(18)
|
|
|
|
Adjustment for
transformation costs (a)(g)
|
|
|
|
|
|
34
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 and 2019
adjustment items
|
|
|
|
|
|
778
|
|
(186)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to the Kroger Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding the
adjustment items above
|
|
|
|
|
|
$
918
|
|
$
586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to the Kroger Co.
|
|
|
|
|
|
|
|
|
|
|
|
|
Per diluted common
share
|
|
|
|
|
|
$
0.18
|
|
$
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment for
pension plan withdrawal liabilities (h)
|
|
|
|
|
|
0.45
|
|
0.05
|
|
|
|
Adjustment for gain
on sale of Turkey Hill Dairy (h)
|
|
|
|
|
|
-
|
|
(0.10)
|
|
|
|
Adjustment for gain
on sale of You Technology (h)
|
|
|
|
|
|
-
|
|
(0.06)
|
|
|
|
Adjustment for loss
(gain) on investments (h)
|
|
|
|
|
|
0.48
|
|
(0.10)
|
|
|
|
Adjustment for Home
Chef contingent consideration (h)
|
|
|
|
|
|
0.04
|
|
(0.02)
|
|
|
|
Adjustment for
transformation costs (h)
|
|
|
|
|
|
0.04
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 and 2019
adjustment items
|
|
|
|
|
|
1.01
|
|
(0.23)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to the Kroger Co. per
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted common share
excluding the adjustment items above
|
|
|
|
|
$
1.19
|
|
$
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares used in
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
calculation
|
|
|
|
|
|
760
|
|
805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-year net earnings
attributable to the Kroger Co. per
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted common share
CAGR*
|
|
|
|
|
|
(56.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Two-year net earnings
attributable to the Kroger Co. per
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted common share
excluding the adjustment items above CAGR*
|
|
28.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
CAGR represents the
compounded annual growth rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
The amounts presented
represent the after-tax effect of each adjustment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
The pre-tax
adjustments to OG&A expenses for pension plan withdrawal
liabilities were $449 and $59 in the first
quarters of 2021 and 2019, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c)
|
The pre-tax
adjustment for gain on sale of Turkey Hill Dairy was
($106).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d)
|
The pre-tax
adjustment for gain on sale of You Technology was ($70).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(e)
|
The pre-tax
adjustments for (gain) loss on investments were $479 and ($106) in
the first quarters of 2021 and 2019,
respectively.
|
|
|
|
|
(f)
|
The pre-tax
adjustments to OG&A expenses for Home Chef contingent
consideration were $43 and ($24) in the
first quarters of 2021 and 2019,
respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g)
|
The pre-tax
adjustment to OG&A expenses for transformation costs was
$44. Transformation costs primarily
include costs related to store and business closure costs and third
party professional consulting fees associated
with business transformation and cost saving
initiatives.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(h)
|
The amounts presented
represent the net earnings (loss) per diluted common share effect
of each adjustment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
2021 First Quarter
Adjustment Items include adjustments for pension plan withdrawal
liabilities, loss on investments,
Home Chef contingent consideration adjustment and strategic
transformation costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 First Quarter
Adjustment Items include adjustments for pension plan withdrawal
liabilities, the gain on sale of
Turkey Hill Dairy, the gain on sale of You Technology, gain on
investments and Home Chef contingent
consideration adjustment.
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multimedia:http://www.prnewswire.com/news-releases/kroger-delivers-strong-first-quarter-results-and-raises-full-year-2021-guidance-301314659.html
SOURCE The Kroger Co.