Exhibit 99.1
Kroger Reports Strong
Second Quarter Results and Raises Full-Year 2021 Guidance
Second Quarter Highlights
| · | Identical Sales without fuel decreased 0.6%; two-year stack increased 14.0% |
| · | Digital Sales two-year stack grew 114% |
| · | EPS of $0.61; Adjusted EPS of $0.80 |
| · | Operating Profit of $839 million; Adjusted FIFO Operating Profit of $947
million |
| · | Alternative profit business continued strong growth tracking toward high
end of annual expectations |
CINCINNATI, September 10, 2021 -- The
Kroger Co. (NYSE: KR) today reported its second quarter 2021 results and will update investors on how key initiatives are positioning
the company for long-term sustainable growth.
Comments from Chairman and CEO Rodney McMullen –
“Our strategic focus on leading with fresh and accelerating with
digital continues to build momentum across our business. Kroger’s seamless ecosystem is working. This was evident during the quarter
as we saw customers seamlessly shift between channels, and we continued to see strong digital engagement. Customers are eating more food
at home because it is more affordable, convenient, and healthier than other options.
“Our associates continue to support our customers and our communities
through the pandemic by delivering a full, fresh, and friendly experience every day. We are committed to our environmental, social, and
governance strategy to advance positive outcomes for people and our planet and create more resilient global systems, driven by our Zero
Hunger | Zero Waste social and environmental impact plan.
“We are leveraging technology, innovation, and our competitive
moats to deliver against the initiatives outlined at our 2021 investor day, and we remain confident in our ability to deliver total shareholder
returns of 8% to 11% over time.”
Second Quarter Financial Results
| | |
2Q21 ($ in millions; except EPS) | | |
2Q20 ($ in millions; except EPS) | |
| ID Sales* (Table 4) | |
| (0.6 | )% | |
| 14.6 | % |
| EPS | |
$ | 0.61 | | |
$ | 1.03 | |
| Adjusted EPS (Table 6) | |
$ | 0.80 | | |
$ | 0.73 | |
| Operating Profit | |
$ | 839 | | |
$ | 820 | |
| Adjusted FIFO Operating Profit (Table 7) | |
$ | 947 | | |
$ | 894 | |
| FIFO Gross Margin Rate* | |
Decreased 60 basis points | | |
| | |
| OG&A Rate* | |
Decreased 76 basis points | | |
| | |
*without fuel and adjustment items, if applicable
Second Quarter Results versus Two Years
Ago
| | |
2Q21 ($ in millions; except EPS) | |
| ID Sales Two Year Stacked* (Table 8) | |
| 14.0 | % |
| EPS Two Year CAGR (Table 8) | |
| 28.4 | % |
| Adjusted EPS Two Year CAGR (Table 8) | |
| 34.8 | % |
| Operating Profit Two Year CAGR (Table 8) | |
| 22.5 | % |
| Adjusted FIFO Operating Profit Two Year CAGR (Table 8) | |
| 23.0 | % |
| FIFO Gross Margin Rate Compared to Q2 2019* | |
Decreased 55 basis points | |
| OG&A Rate Compared to Q2 2019* | |
Decreased 137 basis points | |
*without fuel and adjustment items, if applicable
Total company sales were $31.7 billion in the second quarter, compared
to $30.5 billion for the same period last year. Excluding fuel, sales decreased 0.4% compared to the same period last year.
Gross margin was 21.4% of sales for the second quarter. The FIFO gross
margin rate, excluding fuel, decreased 60 basis points compared to the same period last year. This decrease primarily related to continued
price investments, and higher shrink and supply chain costs, partially offset by sourcing benefits and growth in the alternative profit
business.
The LIFO charge for the quarter was $47 million, compared to a LIFO
charge of $23 million for the same period last year. This increase was primarily attributable to inflation in fresh categories.
The Operating, General & Administrative rate decreased 76
basis points, excluding fuel and adjustment items, which reflects decreased COVID-19 related costs and the execution of cost savings initiatives.
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.
Kroger's net total debt to adjusted EBITDA
ratio is 1.78, compared to 1.70 a year ago (Table 5). The company's net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50.
Earlier this quarter, Kroger increased the
dividend by 17%, marking the 15th consecutive year of dividend increases. Additionally, in the quarter, Kroger repurchased
$349 million shares and year-to-date, has repurchased $751 million shares. As of the end of the second quarter, $779 million remains on
the board authorization announced on June 17, 2021.
2021 Guidance
Comments from CFO Gary Millerchip -
“Kroger’s strong execution resulted
in identical sales above our internal expectations for the second quarter, and we continued to remove costs from the business. Driven
by the momentum in our results and sustained food at home trends, we are raising our full-year guidance. We now expect our two-year identical
sales stack to be in the range of 12.6% to 13.1%. We expect our adjusted net earnings per diluted share to be in the range of $3.25 to
$3.35.
“We are emerging stronger through the
pandemic and are confident in our ability to deliver sustainable earnings growth and total shareholder return.”
Full Year 2021 Guidance
| | |
IDs
(%) | |
EPS
($) | |
Operating
Profit ($B) | |
Tax
Rate** | |
Cap
Ex ($B) | |
Free
Cash
Flow ($B)**** |
| Adjusted* | |
(1.5)%
- (1.0)% | |
$3.25
- $3.35 | |
$3.9
- $4.0 | |
22.1%
- 22.7% | |
$3.4
- $3.6 | |
$1.9
- $2.1 |
| 2-Year Basis*** | |
12.6% - 13.1%
(Stack) | |
22% - 24%
(CAGR) | |
14.1% - 15.6%
(CAGR) | |
| |
| |
$3.1 - $3.2
(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.
Second Quarter 2021 Highlights
Leading with Fresh
| · | Introduced
brand icon,
bringing together the Kroger Family of Companies under one unifying visual and reinforcing
its brand promise: Fresh for Everyone |
| · | Our Brands launched 142 new items during the quarter,
including Big Pack items and further expansion of industry leading Simple Truth Plant Based line |
| · | Announced
collaboration with ghost kitchen partner Kitchen United to create new service that
provides customers on-demand meal pickup and delivery from popular restaurants |
| · | Announced
inaugural Go Fresh & Local Supplier Accelerator cohort, launching innovative
locally and regionally sourced products to stores across the country |
| · | Introduced
collaboration with KNAPP to modernize and expand the Great Lakes Distribution Center,
driving efficiency improvements for regional store replenishment and faster delivery of fresh
food for customers |
Accelerating with Digital
| · | Introduced Kroger Delivery Savings Pass in Florida,
offering customers unlimited delivery for $79 annually |
| · | Launched sushi delivery pilot with DoorDash in three
geographies |
| · | Expanded pilot with Google Maps to improve grocery
pickup experience for associates and customers |
| · | Expanded to 2,239 Pickup locations and 2,546 Delivery
locations, covering 98% of Kroger households |
| · | Recognized by Computerworld magazine as one of the Top 100 Best Places
to Work in IT for 2021, marking the fourth consecutive year Kroger has received the accolade |
| · | Launched FEED app which provides associates easy access to company communication
and resources |
Associate Experience
| · | Increased Kroger Family of Companies' average hourly wage
to in excess of $16 and with comprehensive benefits, will be approaching $21 by the end of 2021 |
| · | Named
to the Disability Equality Index’s 2020 “Best
Places to Work for Disability Inclusion” |
| · | Launched Fresh Start, a technology enabled, personalized,
front-line associate training program to foster greater engagement and retention |
| · | Selected as one of WayUp’s Top 100 Internship Programs
for 2021 |
| · | Hosted a companywide live virtual event on mental health,
featuring company leaders and other experts |
Live Our Purpose
| · | Partnered with the Biden
Administration in offering at-home, rapid COVID-19 tests at cost for 100 days |
| · | Published
2021 ESG report highlighting new long-term ESG strategy and framework to benefit people
and the planet, and to help create a more resilient, equitable food system for tomorrow |
| · | Partnered
with Lyft Healthcare, Inc. after concluding the successful #CommunityImmunity
Giveaway in collaboration with the Biden Administration to increase vaccinations across
the country |
| · | Kroger Health has administered more than 6.7 million COVID-19 vaccine doses
to date, supporting customers and associates |
| · | Named
Winsight Grocery’s Business of the Year for the company’s sustainability
efforts throughout 2020 |
| · | Hosted
The Wellness Experience, a virtual wellness platform and multi-day festival experience
inspiring physical, emotional, and mental health |
| · | Achieved $4.1 billion in diverse supplier spend in 2020, representing an
increase of 21% versus prior year |
About Kroger
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 over 11 million customers daily 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.
Kroger's second quarter 2021 ended on August 14,
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,” “approach,”
“believe,” “contemplates,” “continue,” “deliver,” “expect,” “future,”
“guidance,” “on track,” “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 , lack of access to vaccines for certain populations
and the extent of vaccine aversion, as well as the effect of emerging targeted vaccine mandates and booster vaccines, the potential for
additional future spikes in infection and illness rates including breakthrough infections among the fully vaccinated, and the corresponding
potential for disruptions in workforce availability and customer shopping patterns, re-imposed restrictions as a result of resurgence
and the corresponding future easing of restrictions, and interruptions in domestic and global supply chains 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; 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 September 10, 2021 at ir.kroger.com. An on-demand replay
of the webcast will be available at approximately 1 p.m. (ET) on Thursday, September 10, 2021.
2nd Quarter 2021 Tables Include:
| 1. | Consolidated Statements of Operations |
| 2. | Consolidated Balance Sheets |
| 3. | Consolidated Statements of Cash Flows |
| 4. | Supplemental Sales Information |
| 5. | Reconciliation of Net Total Debt and Net Earnings Attributable to The Kroger Co. to Adjusted EBITDA |
| 6. | Net Earnings Per Diluted Share Excluding the Adjustment Items |
| 7. | Operating Profit Excluding the Adjustment Items |
| 8. | Two-Year Financial Results |
--30--
Contacts: Media: Kristal Howard (513) 762-1304; Investors: Rob Quast
(513) 762-4969
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, WAREHOUSING AND
TRANSPORTATION (a), AND LIFO CHARGE (b) | |
| 24,914 | | |
| 78.6 | | |
| 23,551 | | |
| 77.2 | | |
| 56,861 | | |
| 77.9 | | |
| 55,005 | | |
| 76.4 | |
| OPERATING, GENERAL AND ADMINISTRATIVE (a) | |
| 5,091 | | |
| 16.1 | | |
| 5,297 | | |
| 17.4 | | |
| 12,515 | | |
| 17.2 | | |
| 12,968 | | |
| 18.0 | |
| RENT | |
| 191 | | |
| 0.6 | | |
| 204 | | |
| 0.7 | | |
| 452 | | |
| 0.6 | | |
| 477 | | |
| 0.7 | |
| DEPRECIATION AND AMORTIZATION | |
| 647 | | |
| 2.0 | | |
| 617 | | |
| 2.0 | | |
| 1,508 | | |
| 2.1 | | |
| 1,442 | | |
| 2.0 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| OPERATING PROFIT | |
| 839 | | |
| 2.7 | | |
| 820 | | |
| 2.7 | | |
| 1,644 | | |
| 2.3 | | |
| 2,146 | | |
| 3.0 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| OTHER INCOME (EXPENSE) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| INTEREST EXPENSE | |
| (137 | ) | |
| (0.4 | ) | |
| (135 | ) | |
| (0.4 | ) | |
| (302 | ) | |
| (0.4 | ) | |
| (309 | ) | |
| (0.4 | ) |
| NON-SERVICE COMPONENT OF COMPANY-SPONSORED PENSION PLAN COSTS | |
| 15 | | |
| - | | |
| 8 | | |
| - | | |
| 33 | | |
| - | | |
| 19 | | |
| - | |
| (LOSS) GAIN ON INVESTMENTS | |
| (122 | ) | |
| (0.4 | ) | |
| 368 | | |
| 1.2 | | |
| (601 | ) | |
| (0.8 | ) | |
| 790 | | |
| 1.1 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET EARNINGS BEFORE INCOME TAX EXPENSE | |
| 595 | | |
| 1.9 | | |
| 1,061 | | |
| 3.5 | | |
| 774 | | |
| 1.1 | | |
| 2,646 | | |
| 3.7 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| INCOME TAX EXPENSE | |
| 126 | | |
| 0.4 | | |
| 241 | | |
| 0.8 | | |
| 162 | | |
| 0.2 | | |
| 614 | | |
| 0.9 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET EARNINGS INCLUDING NONCONTROLLING INTERESTS | |
| 469 | | |
| 1.5 | | |
| 820 | | |
| 2.7 | | |
| 612 | | |
| 0.8 | | |
| 2,032 | | |
| 2.8 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS | |
| 2 | | |
| - | | |
| 1 | | |
| - | | |
| 5 | | |
| - | | |
| 1 | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET EARNINGS ATTRIBUTABLE TO THE KROGER CO. | |
$ | 467 | | |
| 1.5 | % | |
$ | 819 | | |
| 2.7 | % | |
$ | 607 | | |
| 0.8 | % | |
$ | 2,031 | | |
| 2.8 | % |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET EARNINGS ATTRIBUTABLE TO THE KROGER CO. PER BASIC COMMON SHARE | |
$ | 0.62 | | |
| | | |
$ | 1.04 | | |
| | | |
$ | 0.80 | | |
| | | |
$ | 2.58 | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| AVERAGE NUMBER OF COMMON SHARES USED IN BASIC
CALCULATION | |
| 746 | | |
| | | |
| 777 | | |
| | | |
| 750 | | |
| | | |
| 779 | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET EARNINGS ATTRIBUTABLE TO THE KROGER CO. PER DILUTED COMMON SHARE | |
$ | 0.61 | | |
| | | |
$ | 1.03 | | |
| | | |
$ | 0.79 | | |
| | | |
$ | 2.55 | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| AVERAGE NUMBER OF COMMON SHARES USED IN DILUTED CALCULATION | |
| 755 | | |
| | | |
| 786 | | |
| | | |
| 758 | | |
| | | |
| 787 | | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| DIVIDENDS DECLARED PER COMMON SHARE | |
$ | 0.21 | | |
| | | |
$ | 0.18 | | |
| | | |
$ | 0.39 | | |
| | | |
$ | 0.34 | | |
| | |
| 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 $47 and $23 were recorded in the second quarters of 2021 and 2020, respectively. For the year to date period, LIFO charges of $84 and $54 were recorded for 2021 and 2020, respectively. |
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 assets | |
| 550 | | |
| 538 | |
| | |
| | | |
| | |
| Total current assets | |
| 12,332 | | |
| 12,286 | |
| | |
| | | |
| | |
| Property, plant and equipment, net | |
| 22,986 | | |
| 21,881 | |
| Operating lease assets | |
| 6,704 | | |
| 6,822 | |
| Intangibles, net | |
| 966 | | |
| 1,029 | |
| Goodwill | |
| 3,076 | | |
| 3,076 | |
| Other assets | |
| 2,397 | | |
| 2,449 | |
| | |
| | | |
| | |
| Total Assets | |
$ | 48,461 | | |
$ | 47,543 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREOWNERS' EQUITY | |
| | | |
| | |
| Current Liabilities | |
| | | |
| | |
| Current portion of long-term debt including obligations under
finance leases | |
$ | 1,547 | | |
$ | 1,096 | |
| Current portion of operating lease liabilities | |
| 644 | | |
| 666 | |
| Trade accounts payable | |
| 6,772 | | |
| 6,871 | |
| Accrued salaries and wages | |
| 1,274 | | |
| 1,267 | |
| Other current liabilities | |
| 5,366 | | |
| 4,678 | |
| | |
| | | |
| | |
| Total current liabilities | |
| 15,603 | | |
| 14,578 | |
| | |
| | | |
| | |
| Long-term debt including obligations under finance leases | |
| 12,608 | | |
| 12,386 | |
| Noncurrent operating lease liabilities | |
| 6,408 | | |
| 6,478 | |
| Deferred income taxes | |
| 1,522 | | |
| 1,634 | |
| Pension and postretirement benefit obligations | |
| 494 | | |
| 578 | |
| Other long-term liabilities | |
| 2,568 | | |
| 2,096 | |
| | |
| | | |
| | |
| Total Liabilities | |
| 39,203 | | |
| 37,750 | |
| | |
| | | |
| | |
| Shareowners' equity | |
| 9,258 | | |
| 9,793 | |
| | |
| | | |
| | |
| Total Liabilities and Shareowners' Equity | |
$ | 48,461 | | |
$ | 47,543 | |
| | |
| | | |
| | |
| Total common shares outstanding at end of period | |
| 744 | | |
| 775 | |
| Total diluted shares year-to-date | |
| 758 | | |
| 787 | |
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 provided by operating activities: | |
| | | |
| | |
| Depreciation and amortization | |
| 1,508 | | |
| 1,442 | |
| Operating lease asset amortization | |
| 332 | | |
| 336 | |
| LIFO charge | |
| 84 | | |
| 54 | |
| Stock-based employee compensation | |
| 108 | | |
| 107 | |
| Company-sponsored pension plans | |
| (24 | ) | |
| (9 | ) |
| Deferred income taxes | |
| (24 | ) | |
| 176 | |
| Gain on the sale of assets | |
| (28 | ) | |
| (7 | ) |
| Loss (gain) on investments | |
| 601 | | |
| (790 | ) |
| Other | |
| 122 | | |
| 121 | |
| Changes in operating assets and liabilities, net of effects from mergers and disposals of businesses: | |
| | | |
| | |
| Store deposits in-transit | |
| 41 | | |
| 121 | |
| Receivables | |
| (57 | ) | |
| 117 | |
| Inventories | |
| 377 | | |
| 685 | |
| Prepaid and other current assets | |
| 356 | | |
| (16 | ) |
| Trade accounts payable | |
| 101 | | |
| 522 | |
| Accrued expenses | |
| (400 | ) | |
| 335 | |
| Income taxes receivable and payable | |
| (125 | ) | |
| 195 | |
| Operating lease liabilities | |
| (374 | ) | |
| (302 | ) |
| Other | |
| (87 | ) | |
| 286 | |
| | |
| | | |
| | |
| Net cash provided by operating activities | |
| 3,123 | | |
| 5,405 | |
| | |
| | | |
| | |
| CASH FLOWS FROM INVESTING ACTIVITIES: | |
| | | |
| | |
| Payments for property and equipment, including payments for lease buyouts | |
| (1,319 | ) | |
| (1,343 | ) |
| Proceeds from sale of assets | |
| 107 | | |
| 40 | |
| Other | |
| (72 | ) | |
| (45 | ) |
| | |
| | | |
| | |
| Net cash used by investing activities | |
| (1,284 | ) | |
| (1,348 | ) |
| | |
| | | |
| | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |
| | | |
| | |
| Proceeds from issuance of long-term debt | |
| 1 | | |
| 504 | |
| Payments on long-term debt including obligations under finance leases | |
| (369 | ) | |
| (28 | ) |
| Net payments on commercial paper | |
| - | | |
| (1,150 | ) |
| Dividends paid | |
| (274 | ) | |
| (254 | ) |
| Proceeds from issuance of capital stock | |
| 85 | | |
| 87 | |
| Treasury stock purchases | |
| (751 | ) | |
| (669 | ) |
| Proceeds from financing arrangement | |
| 166 | | |
| - | |
| Other | |
| (159 | ) | |
| (126 | ) |
| | |
| | | |
| | |
| Net cash used by financing activities | |
| (1,301 | ) | |
| (1,636 | ) |
| | |
| | | |
| | |
| NET INCREASE IN CASH AND TEMPORARY CASH INVESTMENTS | |
| 538 | | |
| 2,421 | |
| | |
| | | |
| | |
| CASH AND TEMPORARY CASH INVESTMENTS: | |
| | | |
| | |
| BEGINNING OF YEAR | |
| 1,687 | | |
| 399 | |
| END OF PERIOD | |
$ | 2,225 | | |
$ | 2,820 | |
| | |
| | | |
| | |
| Reconciliation of capital investments: | |
| | | |
| | |
| Payments for property and equipment, including payments for lease buyouts | |
$ | (1,319 | ) | |
$ | (1,343 | ) |
| Payments for lease buyouts | |
| - | | |
| 15 | |
| Changes in construction-in-progress payables | |
| 89 | | |
| (110 | ) |
| Total capital investments, excluding lease buyouts | |
$ | (1,230 | ) | |
$ | (1,438 | ) |
| | |
| | | |
| | |
| Disclosure of cash flow information: | |
| | | |
| | |
| Cash paid during the year for interest | |
$ | 365 | | |
$ | 373 | |
| Cash paid during the year for income taxes | |
$ | 301 | | |
$ | 229 | |
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)
| | |
SECOND QUARTER | | |
YEAR-TO-DATE | |
| | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| EXCLUDING FUEL | |
$ | 27,606 | | |
$ | 27,759 | | |
$ | 64,214 | | |
$ | 65,945 | |
| | |
| | | |
| | | |
| | | |
| | |
| EXCLUDING FUEL | |
| (0.6 | )% | |
| 14.6 | % | |
| (2.6 | )% | |
| 17.1 | % |
| (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.
| | |
August 14, | | |
August 15, | | |
| |
| | |
2021 | | |
2020 | | |
Change | |
| Current portion of long-term debt including obligations under finance leases | |
$ | 1,547 | | |
$ | 1,096 | | |
$ | 451 | |
| Long-term debt including obligations under finance leases | |
| 12,608 | | |
| 12,386 | | |
| 222 | |
| | |
| | | |
| | | |
| | |
| Total debt | |
| 14,155 | | |
| 13,482 | | |
| 673 | |
| | |
| | | |
| | | |
| | |
| Less: Temporary cash investments | |
| 1,886 | | |
| 2,448 | | |
| (562 | ) |
| | |
| | | |
| | | |
| | |
| Net total debt | |
$ | 12,269 | | |
$ | 11,034 | | |
$ | 1,235 | |
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 | |
| | |
August 14, | | |
August 15, | |
| | |
2021 | | |
2020 | |
| Net earnings attributable to The Kroger Co. | |
$ | 1,161 | | |
$ | 2,621 | |
| LIFO charge | |
| 23 | | |
| 113 | |
| Depreciation and amortization | |
| 2,813 | | |
| 2,721 | |
| Interest expense | |
| 537 | | |
| 585 | |
| Income tax expense | |
| 329 | | |
| 764 | |
| Adjustment for pension plan withdrawal liabilities | |
| 1,437 | | |
| 49 | |
| Adjustment for loss (gain) on investments | |
| 286 | | |
| (886 | ) |
| Adjustment for Home Chef contingent consideration | |
| 156 | | |
| 37 | |
| 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) | |
| 145 | | |
| 119 | |
| Other | |
| (6 | ) | |
| (16 | ) |
| | |
| | | |
| | |
| Adjusted EBITDA | |
$ | 6,881 | | |
$ | 6,492 | |
| | |
| | | |
| | |
| Net total debt to adjusted EBITDA ratio | |
| 1.78 | | |
| 1.70 | |
| (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.
| | |
SECOND QUARTER | | |
YEAR-TO-DATE | |
| | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| Net earnings attributable to The Kroger Co. | |
$ | 467 | | |
$ | 819 | | |
$ | 607 | | |
$ | 2,031 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustment for pension plan withdrawal liabilities (a)(b) | |
| - | | |
| - | | |
| 344 | | |
| - | |
| Adjustment for loss (gain) on investments (a)(c) | |
| 93 | | |
| (278 | ) | |
| 460 | | |
| (590 | ) |
| Adjustment for Home Chef contingent consideration (a)(d) | |
| 7 | | |
| 19 | | |
| 40 | | |
| 63 | |
| Adjustment for transformation costs (a)(e) | |
| 43 | | |
| 21 | | |
| 77 | | |
| 49 | |
| | |
| | | |
| | | |
| | | |
| | |
| 2021 and 2020 Adjustment Items | |
| 143 | | |
| (238 | ) | |
| 921 | | |
| (478 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings attributable to The Kroger Co. excluding the adjustment items above | |
$ | 610 | | |
$ | 581 | | |
$ | 1,528 | | |
$ | 1,553 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings attributable to The Kroger Co. per diluted common share | |
$ | 0.61 | | |
$ | 1.03 | | |
$ | 0.79 | | |
$ | 2.55 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustment for pension plan withdrawal liabilities (f) | |
| - | | |
| - | | |
| 0.45 | | |
| - | |
| Adjustment for loss (gain) on investments (f) | |
| 0.12 | | |
| (0.35 | ) | |
| 0.60 | | |
| (0.75 | ) |
| Adjustment for Home Chef contingent consideration (f) | |
| 0.01 | | |
| 0.02 | | |
| 0.05 | | |
| 0.08 | |
| Adjustment for transformation costs (f) | |
| 0.06 | | |
| 0.03 | | |
| 0.10 | | |
| 0.07 | |
| | |
| | | |
| | | |
| | | |
| | |
| 2021 and 2020 Adjustment Items | |
| 0.19 | | |
| (0.30 | ) | |
| 1.20 | | |
| (0.60 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings attributable to The Kroger Co. per diluted common share excluding the adjustment items above | |
$ | 0.80 | | |
$ | 0.73 | | |
$ | 1.99 | | |
$ | 1.95 | |
| | |
| | | |
| | | |
| | | |
| | |
| Average number of common shares used in diluted calculation | |
| 755 | | |
| 786 | | |
| 758 | | |
| 787 | |
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 liabilities was $449 for 2021. |
| (c) | The
pre-tax adjustments for loss (gain) on investments were $122 and ($368) in the second quarters of 2021 and 2020, respectively. The
year-to-date pre-tax adjustments for loss (gain) on investments were $601 and ($790) in the first two quarters of 2021 and 2020, respectively. |
| (d) | The
pre-tax adjustments to OG&A expenses for Home Chef contingent consideration were $9 and $25 in the second quarters of 2021 and 2020,
respectively. The year-to-date pre-tax adjustments to OG&A expenses for Home Chef contingent consideration were $52 and
$85 in the first two quarters of 2021 and 2020, respectively. |
| (e) | The
pre-tax adjustment to OG&A expenses for transformation costs were $57 and $29 in the second quarters of 2021 and 2020, respectively. The
year-to-date pre-tax adjustment to OG&A expenses for transformation costs were $101 and $67 in the first two 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
Second Quarter Adjustment Items include adjustments for the loss on investments, Home Chef contingent consideration adjustment and strategic
transformation costs. |
| | 2021
Adjustment Items include the Second Quarter Adjustment Items plus the adjustments that occurred in the first quarter of 2021 for pension
plan withdrawal liabilities, loss on investments, Home Chef contingent consideration adjustment and strategic transformation costs. |
| | 2020
Second Quarter Adjustment Items include adjustments for the gain on investments, Home Chef contingent consideration adjustment and strategic
transformation costs. |
| | 2020
Adjustment Items include the Second Quarter Adjustment Items plus the adjustments that occurred in the first quarter of 2020 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.
| | |
SECOND QUARTER | | |
YEAR-TO-DATE | |
| | |
2021 | | |
2020 | | |
2021 | | |
2020 | |
| Operating profit | |
$ | 839 | | |
$ | 820 | | |
$ | 1,644 | | |
$ | 2,146 | |
| LIFO charge | |
| 47 | | |
| 23 | | |
| 84 | | |
| 54 | |
| | |
| | | |
| | | |
| | | |
| | |
| FIFO Operating profit | |
| 886 | | |
| 843 | | |
| 1,728 | | |
| 2,200 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustment for pension plan withdrawal liabilities | |
| - | | |
| - | | |
| 449 | | |
| - | |
| Adjustment for Home Chef contingent consideration | |
| 9 | | |
| 25 | | |
| 52 | | |
| 85 | |
| Adjustment for transformation costs (a) | |
| 57 | | |
| 29 | | |
| 101 | | |
| 67 | |
| Other | |
| (5 | ) | |
| (3 | ) | |
| (8 | ) | |
| (5 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| 2021 and 2020 Adjustment items | |
| 61 | | |
| 51 | | |
| 594 | | |
| 147 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted FIFO operating profit
excluding the adjustment items above | |
$ | 947 | | |
$ | 894 | | |
$ | 2,322 | | |
$ | 2,347 | |
| (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 | | |
2021 | | |
2020 | |
| | |
SECOND QUARTER | | |
SECOND QUARTER | | |
YEAR-TO-DATE | | |
YEAR-TO-DATE | |
| | |
2021 | | |
2020 | | |
2020 | | |
2019 | | |
2021 | | |
2020 | | |
2020 | | |
2019 | |
| Excluding Fuel | |
$ | 27,606 | | |
$ | 27,759 | | |
$ | 27,761 | | |
$ | 24,226 | | |
$ | 64,214 | | |
$ | 65,945 | | |
$ | 65,898 | | |
$ | 56,272 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Excluding Fuel | |
| (0.6 | )% | |
| | | |
| 14.6 | % | |
| | | |
| (2.6 | )% | |
| | | |
| 17.1 | % | |
| | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Two-year identical sales stacked | |
| 14.0 | % | |
| | | |
| | | |
| | | |
| 14.5 | % | |
| | | |
| | | |
| | |
OPERATING PROFIT EXCLUDING THE ADJUSTMENT ITEMS TWO-YEAR CAGR*
| | |
SECOND QUARTER | | |
YEAR-TO-DATE | |
| | |
2021 | | |
2019 | | |
2021 | | |
2019 | |
| Operating profit | |
$ | 839 | | |
$ | 559 | | |
$ | 1,644 | | |
$ | 1,460 | |
| LIFO charge | |
| 47 | | |
| 30 | | |
| 84 | | |
| 46 | |
| | |
| | | |
| | | |
| | | |
| | |
| FIFO Operating profit | |
| 886 | | |
| 589 | | |
| 1,728 | | |
| 1,506 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustment for pension plan withdrawal liabilities | |
| - | | |
| 27 | | |
| 449 | | |
| 86 | |
| Adjustment for Home Chef contingent consideration | |
| 9 | | |
| 2 | | |
| 52 | | |
| (21 | ) |
| Adjustment for transformation costs (a) | |
| 57 | | |
| - | | |
| 101 | | |
| - | |
| Other | |
| (5 | ) | |
| 8 | | |
| (8 | ) | |
| 12 | |
| | |
| | | |
| | | |
| | | |
| | |
| 2021 and 2019 Adjustment items | |
| 61 | | |
| 37 | | |
| 594 | | |
| 77 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjusted FIFO operating profit excluding the adjustment items above | |
$ | 947 | | |
$ | 626 | | |
$ | 2,322 | | |
$ | 1,583 | |
| | |
| | | |
| | | |
| | | |
| | |
| Two-year operating profit CAGR* | |
| 22.5 | % | |
| | | |
| 6.1 | % | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Two-year adjusted
FIFO operating profit excluding the adjustment items above CAGR* | |
| 23.0 | % | |
| | | |
| 21.1 | % | |
| | |
| (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*
| | |
SECOND QUARTER | | |
YEAR-TO-DATE | |
| | |
2021 | | |
2019 | | |
2021 | | |
2019 | |
| Net earnings attributable to the Kroger Co. | |
$ | 467 | | |
$ | 297 | | |
$ | 607 | | |
$ | 1,069 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustment for pension plan withdrawal liabilities (a)(b) | |
| - | | |
| 22 | | |
| 344 | | |
| 66 | |
| 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) | |
| 93 | | |
| 36 | | |
| 460 | | |
| (44 | ) |
| Adjustment for Home Chef contingent consideration (a)(f) | |
| 7 | | |
| 2 | | |
| 40 | | |
| (16 | ) |
| Adjustment for transformation costs (a)(g) | |
| 43 | | |
| - | | |
| 77 | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | |
| 2021 and 2019 adjustment items | |
| 143 | | |
| 60 | | |
| 921 | | |
| (126 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings attributable to the Kroger Co. Excluding the adjustment items above | |
$ | 610 | | |
$ | 357 | | |
$ | 1,528 | | |
$ | 943 | |
| | |
| | | |
| | | |
| | | |
| | |
| Net earnings attributable to the Kroger Co. Per diluted common share | |
$ | 0.61 | | |
$ | 0.37 | | |
$ | 0.79 | | |
$ | 1.31 | |
| | |
| | | |
| | | |
| | | |
| | |
| Adjustment for pension plan withdrawal liabilities (h) | |
| - | | |
| 0.03 | | |
| 0.45 | | |
| 0.08 | |
| 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) | |
| 0.12 | | |
| 0.04 | | |
| 0.60 | | |
| (0.05 | ) |
| Adjustment for Home Chef contingent consideration (h) | |
| 0.01 | | |
| - | | |
| 0.05 | | |
| (0.02 | ) |
| Adjustment for transformation costs (h) | |
| 0.06 | | |
| - | | |
| 0.10 | | |
| - | |
| | |
| | | |
| | | |
| | | |
| | |
| 2021 and 2019 adjustment items | |
| 0.19 | | |
| 0.07 | | |
| 1.20 | | |
| (0.15 | ) |
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| Net earnings attributable to the Kroger Co. per Diluted common share excluding the adjustment items above | |
$ | 0.80 | | |
$ | 0.44 | | |
$ | 1.99 | | |
$ | 1.16 | |
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| Average number of common shares used in Diluted calculation | |
| 755 | | |
| 805 | | |
| 758 | | |
| 805 | |
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| Two-year net earnings attributable to the Kroger Co. per Diluted common share CAGR* | |
| 28.4 | % | |
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| (22.3 | )% | |
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| Two-year net earnings attributable to the Kroger Co. per Diluted common share excluding the adjustment items above CAGR* | |
| 34.8 | % | |
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| 31.0 | % | |
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| * |
CAGR represents the compounded annual growth rate. |
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| (a) |
The amounts presented represent the after-tax effect of each adjustment. |
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| (b) |
The pre-tax adjustment to OG&A expenses for pension plan withdrawal liabilities was $27 in the second quarter of 2019. The year-to-date pre-tax adjustments for pension plan withdrawal liabilities were $449 and $86 in the first two quarters of 2021 and 2019, respectively. |
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| (c) |
The pre-tax adjustment for gain on sale of Turkey Hill Dairy was ($106). |
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| (d) |
The pre-tax adjustment for gain on sale of You Technology was ($70). |
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| (e) |
The pre-tax adjustments for loss (gain) on investments were $122 and $45 in the second quarters of 2021 and 2019, respectively. The year-to-date pre-tax adjustments for loss (gain) on investments were $601 and ($61) in the first two quarters of 2021 and 2019, respectively. |
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| (f) |
The pre-tax adjustments to OG&A expenses for Home Chef contingent consideration were $9 and $2 in the second quarters of 2021 and 2019, respectively. The year-to-date pre-tax adjustments to OG&A expenses for Home Chef contingent consideration were $52 and ($21) in the first two quarters of 2021 and 2019, respectively. |
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| (g) |
The pre-tax adjustment to OG&A expenses for transformation costs was $57 in the second quarter of 2021. The year-to-date pre-tax adjustments to OG&A expenses for transformation costs was $101. 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. |
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| (h) |
The amounts presented represent the net earnings (loss) per diluted common share effect of each adjustment. |
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| Note: |
2021 Second Quarter Adjustment Items include adjustments for the loss on investments, Home Chef contingent consideration adjustment and strategic transformation costs. |
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2021 Adjustment Items include the Second Quarter Adjustment Items plus the adjustments that occurred in the first quarter of 2021 for pension plan withdrawal liabilities, loss on investments, Home Chef contingent consideration adjustment and strategic transformation costs. |
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2019 Second Quarter Adjustment Items include adjustments for pension plan withdrawal liabilities, loss on investments and Home Chef contingent consideration adjustment. |
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2019 Adjustment Items include the Second Quarter Adjustment Items plus the adjustments that occurred in the first quarter of 2019 for pension plan withdrawal liabilities, the gain on sale of Turkey Hill Dairy, gain on sale of You Technology, the gain on investments and Home Chef contingent consideration adjustment. |
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