Earnings call transcript Q2 2023

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Operator

Good morning and welcome to the Kroger Co.

Second Quarter 2023 Earnings Conference Call. Please note this event is being recorded.

I would now like to turn the conference over to Rob Quast, Senior Director of Investor Relations. Please go ahead.

Rob Quast

morning. Good joining Second for Call. XXXX for us you Quarter Kroger's Earnings Thank am Chairman Chief McMullen; Millerchip. Kroger's today Financial Chief Gary I by Rodney and joined Executive Officer, Officer, and

forward-looking that such that are materially. predictions or discussions you A caution events statements remind actual can to want to want will I include results statements. and detailed We you of today's differ discussion filings. business may The on obligation that that factors material a many in no have our Company we contained Kroger believe SEC ongoing assumes to an information. on the basis is our effect update

we forward remarks, prepared our questions. taking After look to your

to the and that a cover range that our that Given we can. we will of call earlier broad as limit many ask and still topics announcement we on if you needed one this to as morning, the please Q&A information of yourself necessary. ensure of follow-up divestiture question question We our you will can be breadth extend from covered if one session

will over the Rodney. call to turn I now

Rodney McMullen

you, thank joining and today. you Good Rob. us morning, for Thank everyone,

I'd begin, the have this important moment we to cover. given we for our Before to discussion take framework morning to topics several that like a outline

our on strength an covering results environment provide the cover I opioid supporting will begin and by value as and of how highlights nationwide well update creation growth generating financial consumer Then settlement strong will flow. Gary the and our as earnings is model our framework. free cash

earlier divestiture press with will release conclude the we I issued morning. some this plan brief on comments Finally,

segment today's look forward this for during call. We we to and the our are questions excited plans sharing milestone about taking of your Q&A important

navigate environment second quarter continues to delivered a results. turning to another quarter. Kroger Now challenged our of consistent and effectively

is to our invest economic consistent us uncertainty value of and customers, our to associates the return. enabling deliver in for continue our model deliver persists, strength As shareholder

government factors several on have customers of of budget. top The balancing they tight food pressured at home higher benefits their SNAP mind spending. those as for interest especially are that and remains of inflation are for a many including -- effect reduced our spending, impacting Value customer sustained rates

our support digital rewards discounts, and promotions. and Brands yellow fuel robust delivering Our including customers, increased To we personalized value offers, weekly our loyalty portfolio, through specials are tag

Economic continues customer impact instability to segments differently.

in more value. seeing enjoying and deeply engage behaviors. our are compromise We experience zero households to this with their continue with income us, shopping convenience, customer on Higher quality

Brands up they more These customers premium more pack sizes, Our are especially to as mix valuable our products. bigger and categories purchase to trade shop Fresh

households On pressures. facing the hand, spending other budget-conscious are external

These and price. customers and They are are to buying periods flow benefit payroll smaller the building shelf prioritizing also pack patterns times, switching smaller are customers that baskets stretch to their sizes items SNAP with distributions. and, and spending lower-priced at ebb budgets. exhibiting These lowest

We expect headwinds year. economic the pressuring spending to second these of customer broader continue half in the

the more is the and never environment satisfied in driving of focused units are with the year. half While difficult we are back on we sales

identifying store evolving Our basket teams to add-ons adapting needs. sharpening customers' execution, and are

household at budget-conscious every where in-store as our everyday is trends points. of since assortment lower $X. item our we We in below staples new displays last an saw as an improvement introduced we And quarter example, price expanded

with position long-term price customers continue relative Additionally, provide to value. competitors, exceptional we to improve our key demonstrating commitment to

and for with work. rewarding through to resonating And drive us ecosystem personalization, offering creating our effective is customer targeted allows are are We more customers promotions increased customers needs this us and it seamless more loyalty. and engagement with

our how The customers. is our more second quarter delivering total provide of consecutive now on strategy our for quarter household ninth represented And I'll growth. go-to-market detail

each wide range customer's offerings more budget. XX,XXX can to fit than With portfolio products enjoy Brands. high-quality throughout available, We customers our are Our a reimagining alternatives our of of

year's option improving with Additionally, for brand great on it we lowest our plays Way, provides at those our shelf. prioritizing of the unique brand, our is a ensuring a price and the Last Smart price are work, of role Brands. customers. shelf, the each Our profitability architect are introduction brand we opening Through point resonating

Turning to in traffic. households Seamless, to led rise pickup growth in quarter and delivery strong businesses a was in digital. underscored both another This growth our and excellent by

improving Our is digital experience success. team's relentless customers' the our pursuit driving of

pods hands-free and providing We with to improve productivity expanded and with options speed the across company scaled customers lockers, more technology our flexibility. and pickup improving automated

associates critical playing in a in-store also are Our role our success.

Pickup divisions to now, time. now and path rates. has This cost our business serve our we had continuing by and scale reduced to have incremental quarter, to clear improved fully lowered for loaded profitable positive today a basis. pickup on wait profitability a fill a pickup. contribution some And they time, multiple operations, In sustainable is

us our unique beyond Next meet deliver on personalization. customers' the to price. enables Personalization needs product shelf and value

our data strong driving by loyalty data digital best-in-class work Our is powered science engagement.

clipped more X digital customers year, have this than far So billion offers.

that's help profit just think number billion. three model an engaged to more our like increased digitally households spend engaged as Precision million by Kroger This digitally more We've X.X about important me, To times last X grow loyal, to when are Marketing. households compared us with our amazing year. nearly our you businesses alternative also and growth is

to to gives share about and to quarter model business how environment in growth confidence the diversified navigate continued us earnings ahead. this our more like support I'd our Now ability

profit our quarter businesses. in Starting led an strong Kroger had by profits alternative Precision impressive growth Alternative media second business, Marketing. retail our with

business. seamless continues data drive and Our ecosystem benefits track to which traffic this

science audiences ad delivering to significant clients. value data on insights custom spend these return build to applies and measure KPM its precisely and

announced for a to improve flexibility brands. clients platform, new advertising allows greater serve KPM and in-house outcomes quarter, which This

great strengthen Kroger Health is some agreement a doing customers with in our model. capacity has Health of teams and our of another us The important utilizing live job freed allows our business that our that ESI capacity. help and component better lives Kroger are pharmacies to terminated up

delivering patient pharmacists time Our care and experiences. patient are dedicating more better to

work costs also of teams and lowering our use simplifying automation. We for expanding our by are

improving and plans supporting are driving patient growth. modernized to tools, adherence care which patient We communications through is better

the We and business next opportunity momentum is in the for years. over are by health further and an our wellness believe several profitable this growth encouraged

Our day. are the to years, five experience have wages We remain customers and a raised through amazing XX%. associates last over full our every in committed fresh And friendly associates supporting providing investment wages. we by

associates committed are supporting our We also to development.

associates programs creating help focus to that future our a done culture can has teams say is Kroger made place and and I for support significant often our a come a career. this leaders. where discover to have develop make job a investments to our training tremendous job Kroger

recognized awards recently Brandon management firm. was work from Their capital leading Hall human with eight the Group, a

Kroger We are an are of so doing help employer to you proud of make choice. the work

I'm our inspired bring see to purpose our spirit. how day to associates feed the every human

we the vital Our Zero of purpose is meals Upon donate X by plan how we Waste live Hunger to our in in a part launching committed XXXX. billion | serve. the plan communities Zero impact XXXX, Kroger

excited that in this year, we so ambitious the target ahead share two our to are reached more goal. first of years this We than quarter of

commitment plans announced quarter, we accelerate This our to relief. hunger to

to is in merger the every every to feed of serve. of that it donate billion one person by years. benefit will proposed hunger. perspective, two meal, put people Albertsons, with day enough This XX many for in is merger completion every food feed company that Upon nearly XXXX the the combined the meals To with cities and Chicago this communities of ways Boston will Seattle, Denver, we struggling

take Gary? through now, Gary to our financial I will results. to that With you turn it over

Gary Millerchip

are we Kroger's have very trends everyone. evident years morning, value good and demonstrate diversify you quarter enabling we in resiliency second Rodney, difficult saw strengthen the over in key you, made the recent the despite our consider us of business and Thank results The quarter this model. business two. consistent to investments and to was when deliver results our much our creation environment,

at industry-wide is home disinflation impact food managing the trend our this continues team on While business. excellent job sales, effects an our of doing to

year-over-year growth management, to quarter prior Key results margin in profitability strong include cost from excluding EPS and alternative fuel underlying due fuel despite year continued the tight growth and businesses. a versus gross significant profit headwind for controls improved highlights operating

more Scripts Scripts. after fuel grew provide effect negative terminate the Similar to a positive terminated margin Express on our the items. effect for the adjusting fuel had X.X% excluding agreement rate I'll our results first gross FIFO with to OG&A decision detail agreement quarter. Express with communicated quarter, without rate, been and growth of adjustment previously Underlying and the sales fuel on our now excluding the Identical X%. on effect the have would this

continue the profit was this The second the remainder overall be expect we effect during XXXX. and to slightly would positive operating to case for the on of quarter

we believe of and in the terminate reflects Express our to long-term commitment making that to best decision our Scripts agreement Our decisions the with customers shareholders. interest are

to of our now without sales faster-than-expected end identical second quarter, internal we inflation as fuel. the saw food-at-home low pace. expectations results Turning a decelerate at at In the back were

Inflation lower points XXX the ended basis the than start the approximately quarter of quarter.

sales in which grew XX%. strength business, our underpinned digital Our was growth by

through centers, us continued in in achieve combination Our by membership. stores growth growth network and both channels. and a helped led volumes pickup was our unique of delivery including ramp assets, fulfillment in Boost and CFC delivery The

was Gross XX.X% sales. of margin

quarter Our to FIFO points XX same year. gross compared margin increased last fuel the rate excluding basis

lower of with inflation, primarily in highly strong attributable is agreement terminated improvement team the Brands Express a performance, sourcing our Our to was the and supply Scripts. chain benefits costs, effect balancing doing Our impact effective job and rate the of

tailwinds price shrink higher partially offset by These investments. were promotional and

improvement improving achieved as competitors. shared key this Importantly, position price earlier, also while in to relative was Rodney rate our

many margin one in Supply greater for strategy while our continuing of to over time to invest is customers. chain components efficiency our value of expand

and improved we This across our our chain supply operational meaningful in increased efficiencies capacity network. quarter, productivity transport in utilization and warehouses through achieved

improving increased customers We eliminating our significant in in as our two, primarily crime. we quarter to theft due invest retail chain organized rising waste further continue see while during also ecosystem. Shrink opportunities freshness lower to and supply to costs to by

security be but technology of would the impact trends We initiatives remainder mitigate and solutions, a for to challenge are will increased expect Shrink the the implementing new financial year. to including continue

tailwind operating the we charge we the of million During a $XXX of compared million million offset fuel $XXX charge partially same headwind year-over-year the the $X to for quarter. LIFO LIFO from in million last quarter, during This profit recorded experienced quarter $XXX year. a

primarily adjustment inflation Kroger's LIFO revised XXXX. a items. was our flat for charge excluding downwardly fuel was in OG&A The outlook of rate attributable the decrease remainder to and

for Our excellent underlying and items. improvement adjusting saw and rate OG&A to controlling Scripts, we costs our fuel an job excluding adjustment continues team after do Express in

initiatives experience customer. cost-saving on associate simplification focused technology are without to enhance the impacting the and Our utilizing

our in devices process. $X sixth consecutive enhancements to the data-driven improving introducing packaging productivity For mobile We stores example, deliver we restocking track our remain savings. associate on cost and optimize expanding of shelf-ready in year are to billion by that

this important retail quarter. cents our is price proposition our of program drive last compared customer value part compared $X.XX And The Fuel continued this the fuel an quarter. to was quarter engagement fuel average $X.XX overall $X.XX quarter to our was and fuel second gallon margin in to year. per $X.XX last rewards

significant to historical trends. fuel prior we cycling While fuel compared XXXX from were very results and year, to a profitability was relative margins high remain headwind historically healthy

brief I'd like a provide update on now labor relations. to

Drug the During Southern ratified Fry's In Meat UFCW new and ratified the third XX,XXX a Clarkson have we associates. Clarks, and than Meat with Illinois labor for for new labor agreement we UFCW quarter, associates. the covering Food with also Smiths second more quarter, Dallas the Stores Utah agreements Clarkson

ratio Turning flow. expect increase of This operating X.XX. debt Kroger's capital liquidity pay results to net X.X. flow cash compares Board of total free target to dividends and free of debt over At consistent now second subject and adjusted to quarterly improvements. cash The was to through to company working end strong the Kroger EBITDA quarter, the to continues to net a to adjusted its generate continue to time level record X.X approval. EBITDA expects our total range to this and

following paused repurchase deleveraging the merger to our share program As a with prioritize we reminder, Albertsons. proposed have

and opportunities return reflected be in to of results, deployment capital. above strategy discipline improved highest is our each which prioritizing continue cost significantly our of last the with growth We years support of in This capital, and our that ROIC TSR have model. now three our is disciplined the

This and opioid nationwide framework opioid against substantially morning, claims settlement all settle Kroger announced to Kroger. lawsuits a

share results our in charge billion a in the loss a included per related settlement financial As this to $X.X quarter. resulting result, $X.XX is a of

agreed tax FIFO was amount operating nonrecurring after to paid years to billion This each this billion be $XXX adjusted EPS our over reflect the approximately paid up or $X.X of approximately years, installments. six pay approximately to excluded the XX Kroger results has be with over $X.X $X.X profit our and from settlement, in equal unique billion to charge. million adjusted to Under nature and and

in total five begin would six years. and for XXXX pre-tax the following per and approximately Initial million years per payments first million the $XXX for will December approximately $XXX year year pre-tax

This lawsuits liability Kroger We Kroger or the the agreement settlement does relating admission by resolving crisis. is that of opioid and not Kroger that believe wrongdoing against those final to customers, all not an vigorously by associates shareholders interest and will claims in is of continue claims any best opioids resolve. other defend and to these of its the affected and and

adjusted XX to track to within to ratio a this its payment XX Additionally, we settlement post EBITDA the Kroger's of proposed total ability and net months complete with to will and debt Albertsons on not merger X.X remain achieve affect terms close.

like on the of our color remainder for I'd outlook the closing, additional provide year. to In

occurring XXXX rate shared earlier, continuing conditions. feel a this I As the of we inflation anticipated macroeconomic our than at customers to originally and is effects greater in are

we now full be X% of to challenges present For and identical X%. without the low range our these will will continue navigate believe to of expect at the the sales end fuel to reasons, year we of year guidance remainder

in identical year. expect slightly the fuel be negative sales half the would of We to without second

is As by this sales Scripts, in Express a identical effect reflects our of fuel XXX reminder, reported basis guidance points the which XXXX. approximately without reducing

our our have model flexibility navigate alternative through in growing believe effective cost of we results, the demonstrated we impact the within profits. as environment sales, to management and this slowing Despite year-to-date

the be We are of would ahead year prior the per diluted the line and adjusted and in the at share benefit third prior slightly maintaining earnings our XXrd $X.XX including net before and to with in profit quarter the the in adjusted operating net guidance year adjusted EPS expect week. approximately fourth quarter

the delivered of record past quarter foundation growth Kroger of on the years. another over consistent results built three

continue uncertainties remain, will resiliency strength macro shareholder model the creation we deliver and and attractive to are to our us confident While value total of sustainable returns. allow

I'll now Rodney. to turn And it back

Rodney McMullen

Gary. you, Thank

for with XXX and up label provide and merger entered Before on agreement a announced connection your with our definitive sale with floor brands brief pending let merger. we Albertsons to banners, update distribution that Kroger Wholesale a the as Companies This into open well questions, me Albertson they've Companies. private of our stores proposed in the offices morning, Grocers C&S as centers,

stores with a we announced When year, plans last that to merge plan collected ensure frontline divestiture employed Albertsons we delivering the continue. committed will agreements remain associates remain existing bargaining open, would will will to and

able thoughtful private of critical non-union, would of identify to a fierce international A to union to who a competitor. that reviewed operate players. Since and well-qualified process component we've and domestic public, then, robust a to plan was be diligence buyer from and spanning conducted as buyers dozens to

has led to that announce well-qualified that meets very our process all necessary which buyer to us the of complete Wholesale Grocers, the a are criteria transaction. to proud conclusion We today C&S

the solutions leader of grocery and grocery in largest today and in as supply a record strong supply wholesale industry with one operator private successful track is a America C&S chain retailer. companies an

XXX,XXX a retail supermarkets, including over provides XXX include customers offerings, Kroger retail than store of e-commerce, years, full and includes than all offerings similar service for service independent merchandising, to design what very C&S more example. footprint than supplying retail bases. military house, and and stores chain XXX Operating more suite for sizes, X,XXX the accounting of to in services company products more C&S' stores

their by operates. experienced will an deeply is C&S growth. complete retail the it the the management this with for and continue transaction feed to this invest And to strength financial led communities. communities mission future also long-standing in is team help expansion invested company The where business in

all merger them operational company's and The remain close the today's positions divestiture to operate of will comprehensive associates that frontline infrastructure in ensures efficiency stores plan and The as result competitive successfully environment. a employed. no purchasing will

is collective further C&S bargaining industry-leading investing all benefits growth. include agreements, committed and honoring to which for also

grocery buyer brings employees in FTC-approved record agreements. with having also integrating bargaining experience merger of successfully an a and been prior process company the divestiture collective transactions Importantly, union the with strong

and plan are divested of divestiture business, the support headquarters Included immediate help stores the just industry a includes infrastructure. strong but with deep To centrally long-term located also a sale the teams more operational robust of collection the in than distribution regional facilities success and expertise.

us in consideration, line with to allow In the transaction terms of are expected we opportunity the plan shareholder reaffirm this compelling value and of this creates. terms creation divestiture what financial

that plans in announcement today, agreement. our out are the commitments With merger set the original all we fulfill the confident we

and proposed serve. both corresponding Kroger We proposed the meaningful and merger from This associates you Albertsons America's measurable and early creates Albertsons Our press details. for consumers, and merger this in that with keeps morning track step close XXXX. key to to Albertsons us communities further with our benefits for Albertsons on release Kroger encourage review

the terms well, planning, been close. combined an will we and exciting it's the the deliver post how to teams food experience of talent on see both Albertsons plan are to progressing retail together and company stronger Kroger even work from In omnichannel integration

excited incredibly are together the with future We Albertsons. about

broad shared if reminder, in extend Q&A given this of breadth our announcement will our we morning, As needed today's session we range ensure divestiture to earlier of call, cover a a topics. the information

that Gary questions. and look With your I forward to

Operator

open. Instructions] Morgan Simeon ahead. [Operator now line Please first go your Our from Stanley. you. from question Simeon, is Gutman Thank is

Simeon Gutman

around case changing ask Hi. it's Wanted how if on the 'XX how corner Good off. one cut a talk more you is about my going and and My deflation separate the in we and morning, And been review to pricing, there's to specifically disinflation. to announced? get follow-up a close first I'm then gets everyone. to the to chance merger in question. a time? ongoing Thank it's FTC's waiting begin that Was process seeing allows until process on whether you. was a has then if you're business, this divestiture for the follow-up, Or the elasticity. run you phone and

Rodney McMullen

Thanks, Simeon.

there's dialogue. the we And once the the active information with FTC engagement we merger, and that discussions and announce continue this with share teams process. FTC related the been this and On the throughout ongoing morning, it will

able disinflation, conversations, So steps been conversations there's it's finish to specifics have let more ongoing it. be share. Gary in the ongoing we'll way, On continuing -- along of next terms there'll and and but be now we on the I'll start that

one the that when me in if reminded two you is look, lifetime XX you the I Gary things think years several over deflation at look which years, of I of last XX had remember If of years, we look don't had one, that the you almost. or last we've

the is environment in expect inflation that it both to operating about of able be And competitive successful things be different. from would no we're Kroger the a and model to and found from any standpoint One an we standpoint. we've

are inflation move would the on volume We're aggressive for We you to any see CPGs, We also finding tonnage as additional lag be I'll more has comments finish Gary, in believe are want ways improvements beginning continue many helping there. some as you in partnering us With to slowed. there to cases, make? that that, a let well. --

Gary Millerchip

well. you Simeon, is Rodney. Well, Thanks, relative I Yes. it would our I covered maybe say, expectations. to think All

seen, sort to X% You might certainly, throughout range. end we recall as shared the at evolve year. the in the we continue trends to year inflation of beginning that the X% may in the thought we've of year, And

As year. prepared would of range guided we've the now I the which is end it remarks, expect partly our to be low why that, lower than my level a at to for mentioned sales we in

of be what to if assumption year. low So to to more certainly And single would which, sort differently. the that X% course, long-term our to be assumption now range there's a the reflect the as risk we that expect that return turn digits, that. can low is be But single-digit we'll of our would based our believe, base upon adapt sort base would of to And of said, our for sort is model of of inflation food always out continue X% scenarios X.X% normalized to Rodney needed X% the the end we we'd model that rate. to expect very inflation we inflation in

Simeon Gutman

answers. Okay. Thank luck. you both for Good

Rodney McMullen

Thanks.

Gary Millerchip

you. Thank

Operator

Thank you, Simeon.

Katai next Deutsche question from Krisztina, from is Please now Krisztina Our line Bank. go your open. is ahead.

Krisztina Katai

the thanks and Hi. for Good questions. morning taking

merger. a So Albertsons regarding I have question the strategic

So added slow, natural sales the hasn't value. at I business. much higher that there that the guess look historically ID a have reinvestment will as needed businesses remained M&A I greater but a now. be into post-COVID, there's maybe We Margins think question

get versus versus reinvestment changed regarding curious views your if the targeted has be I'd on level approach your your view. So synergies to October the and of anything

Rodney McMullen

Yes.

been impressed the it biggest you view look for would together. them getting and incredibly me, that merged team, I the working know surprise excitement and the actually Albertsons with talent there at October, is the company doesn't If is today of but the versus to with say positive I've people the

we perspective months. look net-to-EBITDA accretive comfortable shareholder that terms XX that we to what maintain be ranges year investment those the from XX and will you by feel expect ratio a we targeted in would would flow grade be it in that within last cash four, XX% within of of with shared it If at things would from a year standpoint, October very

If for billion. to really you of prices. sure in make that the to And investing always of our remember we're been $X to and from savings customer to. with at one are net would expect committed Obviously, those comfortable plan look still beyond and the going work that's synergies, associates identify also we've the and we that. and hard part And day investing lower are

that commitments October. at associates we outlined customers still at look to get communities. terms the the started this And start confident benefiting benefiting you our just want in and point, in the benefiting we when and So we overall, remain of

Gary Millerchip

year I And had a just now Rodney, if announcement. Maybe, things we, of your add, comments. the obviously, Yes. I agree would to a with almost couple since can. we've completely

the you Albertsons in conversations and planning can confidence have only say would gained for certain more as is that only I merger the talking expectations there's had. Kroger we've we've synergy about while so And

to So the a validate moment we have continue ago. Rodney to been outlined able assumptions that

the only wasn't this was thing company. would is we so results you when we in to announced combined flywheel that think this in the we've just about other I new of synergies. think essentially about fueling Brands sales if merger, talked the announced way our the about I about It mention back in far growing the strength And the digital year, digital strength in our Our ecosystem, think results performance, model accelerate the work combine growth that in very two combination alternative see profit the those model creating the flywheel in effect the companies. significantly across when And think the Albertsons creation Kroger streams, is opportunities we now they're future we of the future better the I working of sort well value and we even and company. elements really that the of for can to combine to the

Krisztina Katai

a potentially that is be morning willing high Thank XXX just level buy I that that And stores, the could to you. Thank would what they that with you. XXX the release? transaction there The this XXX. you talk about maybe was likelihood in versus in today's it And Can sales confidence quick up C&S the just be to a acquiring comment number? think follow-up.

Gary Millerchip

Sure. for Yes, question. thanks the

well is through. very thought We about good think the we So plan very feel the plan.

how for future to make continue the plan in successfully the those the we prepared all number in putting buyer to will now overall infrastructure we be stores spent it. going with successful to forward comments, find both potential concentration sure plan that the shared and the structure As around providing stores a and Rodney right of an with support that together provide different buyers grow really around almost model and that able working XX months the right pulling we

So stores the did originally we the we plan Albertsons agreement, feel mentioned, our potential recall break point, with agreement the the when if you reach of as if as we've has you with would to like, forward that announced. we a divestitures. deal may transaction We very the good not announced of XXX move sort option you about include have in Kroger where a

and make today saw agreements was sure that commitment to be there something sure Albertsons wanted we that very was able that there was essentially plan between a that ourselves if the we to flex make we you So what feel in that announcement the today. to align good and the we to announced needed. up But about C&S is

Rodney McMullen

today announcement part terms will done the of work that's more not forward. also, be the something solution in of That's SpinCo. no the going And

Krisztina Katai

Great. luck. Thank you Best very much. of

Rodney McMullen

Thank you.

Gary Millerchip

Thank you.

Operator

Thank you, Krisztina.

question next UBS. Michael, Lasser your comes ahead. from go Please now Michael is open. Our from line

Michael Lasser

Good for taking question. morning. much Thank so you my

with the of the the to and consistent those it offers flexibility what steps Given today address would other with that taking potential C&S announcement this merger? back concerns? basis blessing the that to divest regulators agreement today number And your Albertsons, what to stores be push with have or potentially could or actions you are

Rodney McMullen

we question. an they and incredibly be bring excited great C&S they'll And to about incredibly the and obviously, a competitors. feel it's table, Michael, what fierce

you including offices, off five we every distribution the able we've addition And check boxes. regional that look last C&S, those to store. to stores you year one look the announced the if we're two seven also transaction label commitments in of at if been we So October private when made selling brands at in centers, to and the

this So base grow incredible that for and be amazing talented incredible from great to an is be able with C&S business an to going operate we'll people.

all we things us, the think would addressed for questions and have. we've FTC the So

of accomplish that a were last contracts recognize buyer October found labor the in commitments year also and well. to able as would the We we made all

to those met like it that we majority because know, things want So did feel list, you those you exceeded Gary, anything as you work. and all well. Christine all would to we've the that I of of have checkoff a and don't add

Gary Millerchip

Rodney. advisers I mean great has think journey, and you to FTC I been well now to excited said the had it we're plan. thought No, help to talk through. this on We've us the well, the very about

Rodney McMullen

Thanks, Michael.

Michael Lasser

annual hear me, Can me? here. Can you Rodney? top-line hear Your rate. I'm growth you

Rodney McMullen

Yes.

out. You cut

so off can couldn't now, asking So you a we question, what if we you said. but hear cutting you were were you hear

Michael Lasser

All right.

about Sorry that.

we the your year, stacks consistent quarter for to of to an Sorry. and the negative is, which that to relatively to less your that half fourth to is IDs, inflation So need be share benefit is back to volume inherently, what is geometric have My if what at are four-year question either IDs both. going for quarter? pick imply or in the up translate would slightly with going guidance, second the look improve, the in experienced despite likely presumably third your is you market of

what to need much going degree need gains? those are investment in How And b) share parts drive to implied of achieve make you order to that improvement -- P&L? volumes going you in are how and other guidance? see you what are to you in the how improvement degree hard to a) an to volume your to going So for price need the to Thank to to order push you. in

Gary Millerchip

Michael. Hi, Thanks question. for the

coming to we think, I to the the of are that largest But as think we of we we do mentioned deceleration. sort expect through, inflation continue prepared comments, in part decelerate.

in being you for then our X% results, the that the into slight to about are that year, growth quarter. slowdown slightly because as in of that label promotions mentioned the to that less plan look expect execute the being down deliver of well pointing And the shared merchandising a to from on customers I customer Smart you look our at above at If there quarter. as and the to would be us in expect the continue and that a maybe inflation start are a well. QX between driving continuing in the expecting period and in for impacting than strategy then that X% continuing you sort second And for connect it's end the our trends. private in slowdown accelerating we decline, also then comment quarter we're first in improvement and of lower-income growing achieved of that the if in more strategies slightly And really the budget period to rate really point with we to which and to the end the the deceleration to your from that working decline households, the things leaning mentioned, number been support digital a my sales Way, be seeing in is customer of some positive the around X% I sales results. the around would quarter final QX, we that X.X% continuing products to delivering saw unit an inflation of have we those the And we by to by execute store of

Michael Lasser

good Thank luck. you very and much

Rodney McMullen

Thank you.

Operator

Thank you, Michael.

Our question next from is Partners. line your comes Please Heinbockel Guggenheim from John go ahead. open. now John,

John Heinbockel

Sure.

I which work algo I'm think that? about are think that against I you than on comp? other comps think in to last And historically headwinds, you right, of the which improvement then X% So right, right, saw we you had think, old you budget-conscious quarter. X% do comp, negative, said curious, math now. on is X% if that some support, to we algo is were as the we normalize Or where and higher the that, inflation, does

And is did they households as So negative? still performing higher still income that before? are the

Rodney McMullen

the talk customer Gary product income meaningfully that about look longer-term fresh buying let you growth stuff. products profitable things. of continues. and and because at start more But higher a bigger-sized buying lot the household, and is if That I'll more

have look improved. at budget-conscious improved, the still you but be trends have If the they but negative, would the shopper, trends

Gary, long-term to model, relative let TSR of terms I'll In the you.

Gary Millerchip

the And and plan the question think year as I maybe second was little Sure. between of the well. your long-term half bit a John leaving

continuing wouldn't grow growth view So and in continue deliver long-term I will food-at-home we're line our achieving algorithm to various to buckets. of that between that we Days. year in different and changing definitely X% about that also long-term through margin will and believe X% say talked ahead X% X% of it I with Investor top grow to expect slightly the a in the our during the of we think and two to growth levers over sort those about to would that X% expand earnings we by growth market both X% line

we're some to expect about would of some a thinking see year, growth chain of continue the We the when environment first in how long-term I think very the in to as the on would the about rate of gross lower models. mentioned that point, of decent closely costs half supply headline of terms the use rest is, the tailwinds around et cetera. remarks think OG&A be sense the would prepared in in areas of margin I that the short-term, sourcing benefits, sort we rest we I and our rate than your in our expecting the Our Brands, given manage continue will to to year.

to when those So we'll to have in we sure we're make model plans accordingly. And adjustments to continue what be operating the that adjusting managing we see do we short-term flex obviously, our costs environment. our

John Heinbockel

a relative and And the adoption? about the quick then on follow-up. pickup? all your process about rollout we've movement in profitability a toward and mean, now I maybe as we are talked that of talked of to update What Where is bit terms I Ocado know you objective. on it

Rodney McMullen

Yes.

look great at and where to and the that energy growth the continued operating need you on we where the we the sheds, be, in a sure progress the ones making Right all basis. now, model. is be those have to the want and on are sheds sustainable on If base they them focused

starts remain once thing repurchase they look shed rate that NPS incredibly somebody the is scores, is I and you important high. very the at The other if the think using

the point a have. make on of making start have have we do. a So sheds making being done. work progress, we on work still ones additional focusing we I lot would wouldn't a until would where sure Thanks, we to meaningful ton we be are to is we say And John. progress, but clear that but the we path that We're of

John Heinbockel

you. Okay. Thank

Gary Millerchip

care. Thanks. Take

Operator

Thank you, John.

is go from question Michael, is ISI. now Montani ahead. line Evercore next Please open. from Our your Michael

Michael Montani

for taking Thanks everyone. the Hi, question.

ask wanted ESI. about Just to

you and of towards the end business And some if that kind then ask the if level, could part improve it. be question model be market to might it share was case? the alone partner? related is to earlier you a seem of But So benefits wanted I why one of high to going the be would to that a comfortable good could what of find longer-term the year, at can't that thinking

Rodney McMullen

On a card combination companies on our also I with doing ESI, patients. incredibly direct retain proud some done of it's for am and of part all, amazing Yes. job discount meaningful able leveraging a first of being and contracting those our of pharmacy They've customers an teams. to

you I done the minimizing when at look an overall, So job think, they've on incredible effect.

very the on said, make care to Now where shared X.X% think, taking quarter, we always be have money still But focused care trying we it's or that but we're of where patients. are sure this we about taking in over X.X%. with that comfortable I -- way a of we're don't we with and We're I think filled. do prescription to able customers every lose on to

to you So the to add very focus want with and feel we that's really where on, anything that? comfortable we what Gary, are. is

Gary Millerchip

good. all think, No, I'm Thanks. I

Michael Montani

X the we than It quickly wanted Just X.X to divested stores, be implied pushback. less thought. which on times was the transaction have a to some I multiple had up, to seems the times, if by for little around could, follow potential

the profitability of know what in the of the might to those divested the didn't stores potentially I increase So if needed vis-a-vis that be context ability the could if you potential deal discuss locations. to close

Gary Millerchip

question. Yes. Thanks for the

of contemplated confusion because think shared for assuming and but shared in XXX to that be the which divestiture mentioned plan. think structure. we around SpinCo overall was a And be relative the the, was multiple XXX been stores multiple times have to we the potentially the on or It we've in stores only information could that for solution agreement EBITDA. SpinCo, fall actually part the wouldn't what previous the a that solution I all was a I three geographies, the that maybe that were could were

successful what as So forward being assumed the number. modeling transaction in prepared our bit our number shareholders this line a manage being and in solves price the our future also But comments, it's to C&S plan. actual we than Rodney contemplating. with term haven't Rodney able in we that to We more mentioned, It value actually would new And that with simplify a announced a services little combined it's as be it a able would that in for below different for operator future divestiture much the to actually a a to well. in allows we all transition the will in believe are solution that important to said, number a were be be the that to effectively as elements today. very be company And drive because, move we for help the be shareholders. actually mentioned would able longer believe multiple us fact, good

we when with consistent deal were the with what October. us on that back keep thinking much in we we the very commitments announced So and shared would track

Rodney McMullen

Thanks, Michael.

Operator

Thanks, Michael.

Please question go now ahead. from your is from open. Kenneth, Kenneth next is line Our Goldman B. JPMorgan.

Kenneth Goldman

Hi. Thank you.

kind mentioned food the of for improve guess, bit. center I way branded, going store You a vendors. you're your It's of lot little seeing volumes packaged start other to a

seeing been perimeter a boost right better? volumes wanted where less get a are of departments the your behavior terms which if store better. your at But center on a more their I Maybe has that Just doing expense store? maybe And don't of of color consumers that I'm I highlighted little there you're little you're they're getting, seeing also brands difference. much bad You the core the or in are the is there is, curious know to that change explains to guess the shopping. question phrase if bit those

Rodney McMullen

Yes.

many of at but of do call I grinds, meat some volume, things. for people things. of you're would an there's and publicly people that department, if we a more to look couple seeing it those like you or terms or know much hamburger in that, meat the One, In don't move chicken example,

So starting tonnage that. you to improvement some relative see are to

moving beginning in You their on more be the are And we CPGs in aggressive entry to seeing mentioned as And see affecting that prepared partnering, CPGs. point tonnage on also many moving be would people remarks, cases. are I the to well. some price obviously, the

improve budget as things there's happening, satisfied supporting never and focus you're that all of the well. making you are. sure a starting that on where But ton but So are on those trends of to are a customer we're with

Kenneth Goldman

you. down deflation in even And it is deflation that follow-up, disinflation well. and though it long then thing, did been rare I concerns a declined investors the as your time core helped It couple a years. competitive some operating has Thank for which as last a last think income around gross possible what time, a about was a environment margins of actually drive fairly and came

in less what And as confidence that struggling guess will a the competitors I remain your So risk rational that where factor rational, guess? little of are what are the gives they you to bit I'm -- extent potentially guidance consumers your more, about world a them as is, curious what I today? being does

Rodney McMullen

XX years, customers the Yes. model, competitive for long-term and look XX than When the will at get more benefit been you get case is we our the the always assume years because of that's last market it XX that. years,

are The north diversified into look our the other streams, today model our time alternative thing billion. last if business example. $X even exist That well that's economy the was of as income you tough, when is businesses an at didn't different built that's

the supermarket margins. If you margins a retail alternative look different at the than obviously of part from the media business, completely are seamless standpoint, those is profit which

we back to generating debt. buy used cash at are to So of the look the of to significantly above the model you part is cost in still the things flow all that of But pay we and remind were thing the if important outlined, think we that you've is price of company. thinking. And our for our stock long-term those generate but and continue part I are things stock shareholders, capital, of people didn't, even scenario value and dividend that value the the balance a significantly economic always

a of all important but the time. things, So of are model it is I it was market it those think, last different than today parts

Kenneth Goldman

Thank you. Great.

Rodney McMullen

Ken. Thanks,

Operator

Kenneth. you, Thank

Ed, is your ensure Kelly Our muted Wells go Please your ahead. not Ed, is from your are ahead. that Please is Ed line from go on open. line question Fargo. now please Ed, side. next now open. you

Edward Kelly

Guys, can hear you me?

Rodney McMullen

We can ahead, Go Ed. now.

Rob Quast

next the We'll question. move on to

Operator

you and line speak try want is Did Your Ed. Hi, open. again? to

next open. your Bania Our go is is from from Please question ahead. line now Kelly, BMO. Kelly

Kelly Bania

Hi. Kelly This is Bania.

ask. I to I I Thanks, wanted think guess I'm up. Ed.

Rodney McMullen

hear Kelly. you, Hi, Yes. We you. hear can Kelly. can We

Kelly Bania

Okay. Good. to I ask about divestiture package. wanted the

the the structured the valuation comment four-wall is EBITDA that that slightly was think was I below at. times SpinCo for made this three the

so than willing on planned be EBITDA what just that these to viable accept best interest I for guess, margin option? in And share SpinCo estimated the was valuation And are or to can Kroger's a a you stores? you available comment lower that why would was XXX if through EBITDA

Gary Millerchip

to SpinCo as divested Hi, when would plan Kelly. for alongside SpinCo of FTC. a need be we question. to footprint a but geographies, recap, always covered the the solution a was sort option part involved with geographically always Thanks Essentially, the think option just the as other be a sort going have of announced that an with of that was take Albertsons, about we that been would we to covered The we as solutions. contemplated when group of certain to merger stores package would the that store the whole that it have of would not the SpinCo have communicated

services where the companies the sort the solutions, from to forward and with had have transition significant their effectively. perspective technology always would operate time which different need plans put period take if you both the adds of around working together also separate but we have to So companies implementing, a SpinCo around of to buyer, like, another future complexity with two agreement, complexity of to FTC,

believed that team, find So day bring sheet, we believe can that plan, commitment set also available, I is were more and solution them C&S that, option. when But longer for management be execute move will able the a always we business viable future plan. that well-capitalized a investing options in would to likely better we able could a term, balance able that do say together that, strong to a with the as looked to enable a on that in being put was would viewed which to that a strong buyer to to effective do Kroger a always SpinCo both capable do, everything if a solution then the a of be we at them one, but for forward assets from single we to

of when one the being October. it's evaluation other with commitments all transaction EPS valuation I that know onetime back $X of years essentially valuation specific announced we without why the and our to on shared costs when four was we C&S. models we and that assumed shared, the in over details that's accretive in So improvement around synergy announced metrics of year go line But billion all with with the today -- in that we didn't that into based we in we

as with could haven't consistent we That were we chance obviously, what assuming. deal actually baked plan discussions when because Albertsons. that buyers with very that So But had we the to only XX part the to talk point. answer only fully of was SpinCo through share the announced at we was the was really

Kelly Bania

to us same structure would SoftBank potential we or Just valuation? -- the the transaction stores C&S And under and the commitment here this additional potential then similar understand partner also, be financing for the helpful. the you the should there. assume XXX very XXX help stores? question That's from with a and quick that And can would incremental a Okay.

Gary Millerchip

it's terms does as Yes. sort was plan. if feedback stores, of the But on we of strong received have. really we that earlier, as questions certainly feel really of we've thought shared the and evaluated believe very about it first plan that incremental address all Thanks, we We a of about we Well, Kelly. package the that and the and required. in we more that details share all, good

them, it our investing we we're be and specific focus got so to financing That's to to in to. did comment them to build flexibility to will have something strength say to but the able C&S' able we to if with that. important moving financing forward perspective, also into that that to the complete forward on financial wouldn't keep plan. on strength our if think going from we was both strategy. be So is able would really to well. just able But comment that for that obviously be to as I with agreement their on they very the financial transaction they flex, be strategy I and wanted comfortable the business the feel do have

Rodney McMullen

Kelly. Thanks,

Operator

Thank you, Kelly.

from from is now Oppenheimer. question your open. next go Rupesh Parikh Our Rupesh, line is Please ahead.

Rupesh Parikh

thanks and morning my Good taking for question.

I So promotional touch to the competitive just wanted backdrop. on

right in just seeing the there lately? to desire on clear curious, now the waning and And for environment. out you Just there what industry drive then there as curious front is guys competitive a is volumes. inflation Any are changes promotional the

the promotional expect if curious become just coming or in months So it guys you more quarters. to

Rodney McMullen

Yes.

pre-COVID. promotional If is getting you close it activity overall, look where at the to was

really a such and it's mess with were where it And be. to COVID, it's So are obviously recovering. pretty the expected consistent chains supply we those during

their If you getting you terms focus for CPGs, starting conversations now in it's look do own tonnage the much -- units. some at on the to back with getting raise it's part cases, the how more to CPGs, in they're And normal and most margins again. of grow

try such like our share the an feel know, of it's gain we we have amazing rate for well. CPGs as So of part as doing are if set equation reasons, of always that good because Our repeat us, Brands Brands customers. healthy we strong an the Because go-to-market and important And products. for it's them, that incredibly aren't the people a overall justifiable, one is believe things Our when you dialogue is

Rupesh Parikh

question. Great. follow-up just And maybe then one

seen you worse? pretty the stays year, your the to expect about as Or on it sense what get to the similar So to think you wanted I team assuming for backdrop balance of student a And of is loan you've just just get impacts grocery. at how look you recently? consumer also do

Rodney McMullen

happens. is it part a one little say do do That's standpoint, will tougher will don't repayments. environment a it an for categories. the be that the until student if believe from I know the was from consumer added be going We get, impact less you standpoint, last it And hadn't that's you would than where expect to we part, loan sure other that grocery on the Yes,

happens, but headwind, to be the So a that specifics just know. you it until we've assumed don't

Gary Millerchip

their incremental We we obviously And talked impact on that know factored some it. on Rupesh, also say, cost a of food risk customers to though, be home thinking. customers into their which financial it's to pay budgets budget, going places What go that, is about to the to at the overall adjust meaningful they versus eating more eat one our first that out. to we've creates is for

So a interesting that's to it would that be be out well. turns helpful trend if see over time as to

Rupesh Parikh

Great. color. luck. Thank Best all you for the of

Rodney McMullen

Rupesh. you, Thank

Gary Millerchip

Thank you.

Operator

Rupesh. you, Thank

Wells open. Ed, is your go Our question Fargo. from now next Kelly Ed from ahead. is Please line

Edward Kelly

hear now? Hi, guys. Can me you

Rodney McMullen

Yes, we commercial. It a sounds can. like

Edward Kelly

maybe year I really of can't, with, well, margin say the you at what traditionally would environment about any gross All grocers those year seems benefit going actually good. earnings If how sustainability right. think can. that's control for improvement you continued in of about where ask be that back growth margin, Good. keep forward. out to getting even in you happy is areas wanted hear to like going of do I of environment and we to opportunity guess, flat? for were difficult cost half the minimal it's offset or get LIFO, it we earnings so type really 'XX But an the look potential are for I'm the next I comp, thought to you to this as

Gary Millerchip

of year. a it's the during what prior I in gross maybe get in think as look know, current But Brands is and margin mentioned how been if do doing until in team would merchandising cycling the if improve out at more business. look called that range, work question. do how short-term, Ed, that don't portfolio would rate, we Our is, you the but tailwinds Simple forward I at Smart we the by what of model guidance we as quarter mean private Kroger to sourcing is areas in how of continue terms on on we us the of earlier, it sort to the brand drivers like our best our our the category helped being we've Brands, Truth Yes, from great different as really get I What benefit activity practices. of tremendous on focusing amount Way Rodney long-term typically we product both how you a versus that each the we one-time year later we've those with across and beyond say reach call comment on into Our maximum And the architect to value continue products we selection product the do drive innovate,

almost third taking right work probably value. way the you would and a a to mindset So saying, CPG maybe that really type that tell kind we team through they're our how to the of of approach do maximize now. would products And I say

continue routes. chain I my of in lot the believe, which by in effectively invest a can in and supply is continue in Our ways because engagement about it and technology, in being So continuing great chain be, innings comments, Kroger but digital in Brands keep alternative talk as our us capacity drive of doing routes we Alternative to believe chain performance. on the you've to From through optimize a supply there's continue opportunity supply to the Marketing driving team we we're the about taking, data significantly that we particularly identifying before And job growing heard profits we we can perspective, our Precision there. potential early still us strategy utilizing ahead more to of significant business. the still, believe efficiency our we're again, to the that leveraging opportunity, mind we we're profit, mentioned get stronger as those a still for a

So be how talked we've And we that to over these say a for continue I years we plans we a a think, do time. good say in we've have overall, few we areas. profitability to degree would confidence to journey levers that improve manage I'd on that able investors see about continued to those of been

invest going continue driving top that the in Now all to we're deliver and to said, to being time growth balance we're over so that customer there well. line model to continue obviously, more that as value

Edward Kelly

All follow-up. quick settlement right. And a had Is correct? Albertsons just think has yet. that I don't a large opioid

Rodney McMullen

That would be correct.

Edward Kelly

Okay, great. Thank you.

Operator

Ed. you, Thank

question Please is from Lynch. from America ahead. your Bank open. is next Robert Ohmes now line Our F. Robert, of Merrill go

Robert Ohmes

okay? you. Thank you me Can hear guys

Rodney McMullen

Yes. Good Robbie. morning,

Gary Millerchip

Hey, Robbie.

Robert Ohmes

Okay. Excellent.

deal. two questions You can me. the Great. hear Hey, C&S follow-up on

that of Was with first outlined? and five the The regional Or two headquarters, guess, one, part the unique -- this just C&S? sort brands. that original the deal headquarters I to of private October ATCs is

Rodney McMullen

it It's until it where know of But would knew specifics. had was the -- actually you part we consideration. things be you the wouldn't specific a one part that those Yes. buyer, of

it it either where we what things ground on that something of to So was the had be depending that have in been. the it -- we wasn't particular to be had could in buyer order would one hit have particular would always was the one able needs those managed needed way, find buyer mind of running. might But a day that, that that our back of

Gary Millerchip

the to separate be think about And to a as set was going be company. course, had you would Robbie, full be if maybe, that thing -- SpinCo up SpinCo, I add would only of

would meaningful for with assets business a from Albertsons not across So it Kroger viable be that of be to the some SpinCo to having to moved have or have other it move solution, would than what have would infrastructure today. any

buyer have we forward So C&S. a probably move not more the terms of that have in meaningful would that with like impact been

Robert Ohmes

of a helpful. stores fair Kroger plan. the and Got October of of looks it Teeter or like Harris the the Or as I part this? in thinking? of Harris like as of banners like original noticed of a mix greater there's the amount you. That's Was part And guess, then Teeter that stores, part that Kroger Virginia, was thinking part there I is

Rodney McMullen

be was stores Kroger always It the divested some to of would it of the stores. be that thinking part for best be to original

year. new done to late wasn't analysis that was something was the that So last that

Robert Ohmes

banner it. total Kroger the announcement? the And stores what's C&S Got in

Rodney McMullen

a isn't still specifics this the so wouldn't middle banners, -- specific not the of number of would the stores the yet. and state press In number the but There release at there be point. by wouldn't specifics. FTC be that We're in Yes. there dialogue the with show

Robert Ohmes

Got dilution year you. whether And there do is in question, you the last XXX? XXX expected any difference in one, just or

Gary Millerchip

we're divesting mentioned of think the plan Yes, focused for addresses all earlier, viable are we're the that effective really have a a as store to believe XXX And in we Robbie, that is because degree the areas operator I stores. package that. that markets solving the high important confidence we in on have we that, really

would move say, really from feel what the plan the we still share our that a I And based that we've to So feel if the with we've between over additional obviously, got very merger and And we guidance by that moving now we done in some confidence forward anything, in degree change respects guidance to the we've for back around would thinking in if the point would identify consistent we've work guidances the with. that be those that concern if work and strong in expectation. able shared more shared gives October C&S still plans be do of very that would we plans that that. of on been we're the shared. to us much our Albertsons, a time, say now shared, we we planning this high with plans to would some we a details -- with the that the have are away at anything But nothing were

Rodney McMullen

Thanks, Robbie.

Robert Ohmes

Great. Thank you.

Operator

you, Robert. Thank

Dean, is from line ahead. go Dean question Bernstein. from final your Our comes Rosenblum today open. now Please

Dean Rosenblum

so Thank making the for two questions appreciate I much I guys. for you divested question. the regarding have really it. time so much. Thanks Hey, stores.

allow second or And under question to C&S mentioned on existing allow are I now there's on. you've little to the the C&S for you guys banners, is And stores? guess there's terms there. where stores you And stores a their two-part and located? if going acquirer as do if debate currently One Can you any going about you to the the be. to share the idea you are Because C&S is retail. existing the locations is announced not, C&S question the between Piggly those to what it's have stores operating in Wiggly overlap operate operates of geographic where they're under operate some banners actually first that yes divested are stores then very the the plan at -- that stores Thanks. whether you big rebranding The known question is XXX no? detail stores

Gary Millerchip

for Thanks question. Yes. the Sure.

what part So just three provided shared to the morning of be C&S this plan. as bannering, that we'll be with on banners we clarify the will was that divesting

all package. -- will and that will and So that banner Colorado, Mariano's, under receive the Wyoming in acquiring And so license QFC Carrs be a banners essentially California, states, they be to are divestiture part of would Albertsons four as also they the operate

Rodney McMullen

Arizona.

Gary Millerchip

Rodney. Arizona. Thanks,

speak So I them have four That's in states essentially, other operate use they to what mentioned banners choose the and C&S, in for will stores. their to I banners plans to any obviously right the But Albertsons the use move and and those to won't decision states three their are. able be the they forward.

ultimately they are make they than -- will be time. buy different will over banners a a today, four those if period that that decision stores of So would need would they over they re-banner those But not keep stores to time.

Rodney McMullen

And Midwest in and the operate the and be would would Northeast. Wiggly Piggly the the stores in Grand they the Union South be

Gary Millerchip

C&S it market in have in because part new markets are new capability introduce for Yes. plan as a competitor infrastructure where to We the well. the think and that compelling they but a able actually present competitor will of that's a

Rodney McMullen

everyone, Yes. Thanks, all questions. for and the Dean, thanks,

a As our share listening always, I'd few directly like to comments with associates in.

$XX,XXX upcoming our up to want their course to Your gets school all continuing season Feed our wish Your the program. Future is cover continuing their Feed acknowledge and As families we the education underway, back-to-school each career the our for associates who associate on year through luck good education. that benefit continue provides over to education Future of own

are in excited well. results, associates free reflect these to bringing talked utilized earnings this We merge a about drove we're more benefit model again in that than cash XX,XXX of being participants alternative closing, started growing to XXXX, in XX% to which and we that that is associates. as we delivering We're Kroger hourly so to Albertsons to we've of see By once managing the chosen proud are generated continue and the environment. consistent And quarter. flow streams, and we've increase and strength committed this overall, with this your profit benefit career strong challenged then our that growth you've number grow thankful since business program have with costs to approximately Kroger

proud ability our these creating our value results to We customers. deliver are while of for

providing and a We are associates full, their fresh friendly thankful customers for our incredible dedication our experience. to and

remain That to We to when has we divestiture are for we step Albertsons. announced significant fulfilling for through our the Kroger out with the concludes year merger joining last set proposed commitments taken our Thanks plan and we us the everyone committed today. commitments call. today's all excited merger again fulfill about

Operator

call. today's concludes This

may disconnect your lines. You now

The Kroger Co. (KR) 8 Sep 232023 Q2 Earnings call transcript