KROGER CO [KR] Filings

10-Q 1 kr-20241109x10q.htm 10-Q The Kroger Co._November 9, 2024

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 9, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-303

The Kroger Co.

(Exact name of registrant as specified in its charter)


Ohio		31-0345740
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1014 Vine Street, Cincinnati, Ohio 45202

(Address of principal executive offices)

(Zip Code)

(513) 762-4000

(Registrant’s telephone number, including area code)

Unchanged

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common, $1.00 Par Value	KR	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

There were 723,606,130 shares of Common Stock ($1 par value) outstanding as of December 10, 2024.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Third Quarter Ended				Three Quarters Ended
	November 9,		November 4,		November 9,		November 4,
(In millions, except per share amounts)	2024		2023		2024		2023
Sales	$	33,634	$	33,957	$	112,815	$	112,975

Operating expenses
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below		25,948		26,477		87,332		88,032
Operating, general and administrative		5,898		5,646		19,388		19,974
Rent		203		201		672		671
Depreciation and amortization		757		721		2,486		2,396

Operating profit		828		912		2,937		1,902

Other income (expense)
Net interest expense		(86)		(94)		(294)		(341)
Non-service component of company-sponsored pension plan benefits		3		7		9		24
(Loss) gain on investments		(20)		26		(125)		317
Gain on the sale of business		79		—		79		—

Net earnings before income tax expense		804		851		2,606		1,902

Income tax expense		187		204		568		472

Net earnings including noncontrolling interests		617		647		2,038		1,430
Net (loss) income attributable to noncontrolling interests		(1)		1		7		2

Net earnings attributable to The Kroger Co.	$	618	$	646	$	2,031	$	1,428

Net earnings attributable to The Kroger Co. per basic common share	$	0.85	$	0.89	$	2.79	$	1.97

Average number of common shares used in basic calculation		723		719		722		718

Net earnings attributable to The Kroger Co. per diluted common share	$	0.84	$	0.88	$	2.77	$	1.95

Average number of common shares used in diluted calculation		728		725		728		725

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Third Quarter Ended				Three Quarters Ended
	November 9,		November 4,		November 9,		November 4,
(In millions)	2024		2023		2024		2023
Net earnings including noncontrolling interests	$	617	$	647	$	2,038	$	1,430

Other comprehensive income (loss)
Change in pension and other postretirement defined benefit plans, net of income tax⁽¹⁾		(1)		(3)		(3)		(10)
Unrealized gains and losses on cash flow hedging activities, net of income tax⁽²⁾		(50)		121		(103)		317
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax⁽³⁾		2		1		6		4

Total other comprehensive (loss) income		(49)		119		(100)		311

Comprehensive income		568		766		1,938		1,741
Comprehensive (loss) income attributable to noncontrolling interests		(1)		1		7		2
Comprehensive income attributable to The Kroger Co.	$	569	$	765	$	1,931	$	1,739

(1)	Amount is net of tax of $(1) for the third quarter of 2023. Amount is net of tax of $(1) for the first three quarters of 2024 and $(3) for the first three quarters of 2023.

(2)	Amount is net of tax of $(14) for the third quarter of 2024 and $36 for the third quarter of 2023. Amount is net of tax of $(30) for the first three quarters of 2024 and $96 for the first three quarters of 2023.

(3)	Amount is net of tax of $1 for the third quarter of 2023. Amount is net of tax of $1 for the first three quarters of 2024 and $2 for the first three quarters of 2023.

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED BALANCE SHEETS

(unaudited)


	November 9,		February 3,
(In millions, except par amounts)	2024		2024
ASSETS
Current assets
Cash and temporary cash investments	$	13,358	$	1,883
Store deposits in-transit		1,082		1,215
Receivables		2,193		2,136
FIFO inventory		9,960		9,414
LIFO reserve		(2,375)		(2,309)
Prepaid and other current assets		807		609
Total current assets		25,025		12,948

Property, plant and equipment, net		25,698		25,230
Operating lease assets		6,829		6,692
Intangibles, net		865		899
Goodwill		2,674		2,916
Other assets		1,327		1,820

Total Assets	$	62,418	$	50,505

LIABILITIES
Current liabilities
Current portion of long-term debt including obligations under finance leases	$	187	$	198
Current portion of operating lease liabilities		667		670
Accounts payable		10,521		10,381
Accrued salaries and wages		1,185		1,323
Other current liabilities		3,714		3,486
Total current liabilities		16,274		16,058

Long-term debt including obligations under finance leases		22,414		12,028
Noncurrent operating lease liabilities		6,512		6,351
Deferred income taxes		1,556		1,579
Pension and postretirement benefit obligations		371		385
Other long-term liabilities		2,397		2,503

Total Liabilities		49,524		38,904

Commitments and contingencies see Note 5

SHAREOWNERS’ EQUITY

Preferred shares, $100 par per share, 5 shares authorized and unissued		—		—
Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in 2024 and 2023		1,918		1,918
Additional paid-in capital		4,038		3,922
Accumulated other comprehensive loss		(589)		(489)
Accumulated earnings		28,299		26,946
Common shares in treasury, at cost, 1,194 shares in 2024 and 1,198 shares in 2023		(20,766)		(20,682)

Total Shareowners’ Equity - The Kroger Co.		12,900		11,615
Noncontrolling interests		(6)		(14)

Total Equity		12,894		11,601

Total Liabilities and Equity	$	62,418	$	50,505

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three Quarters Ended
	November 9,		November 4,
(In millions)	2024		2023
Cash Flows from Operating Activities:
Net earnings including noncontrolling interests	$	2,038	$	1,430
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization		2,486		2,396
Operating lease asset amortization		465		472
LIFO charge		66		131
Share-based employee compensation		133		124
Deferred income taxes		9		(261)
Gain on the sale of assets		(8)		(45)
Gain on the sale of business		(79)		—
Loss (gain) on investments		125		(317)
Other		29		120
Changes in operating assets and liabilities:
Store deposits in-transit		134		(70)
Receivables		(238)		133
Inventories		(662)		(502)
Prepaid and other current assets		(204)		45
Accounts payable		578		991
Accrued expenses		77		(387)
Income taxes receivable and payable		28		148
Operating lease liabilities		(451)		(539)
Other		(136)		999

Net cash provided by operating activities		4,390		4,868

Cash Flows from Investing Activities:
Payments for property and equipment, including payments for lease buyouts		(3,133)		(2,907)
Proceeds from sale of assets		310		94
Net proceeds from sale of business		464		—
Other		(43)		68

Net cash used by investing activities		(2,402)		(2,745)

Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt		10,499		—
Payments on long-term debt including obligations under finance leases		(145)		(755)
Dividends paid		(651)		(586)
Financing fees paid		(116)		—
Proceeds from issuance of capital stock		106		42
Treasury stock purchases		(125)		(54)
Other		(81)		(60)

Net cash provided (used) by financing activities		9,487		(1,413)

Net increase in cash and temporary cash investments		11,475		710

Cash and temporary cash investments:
Beginning of year		1,883		1,015
End of period	$	13,358	$	1,725

Reconciliation of capital investments:
Payments for property and equipment, including payments for lease buyouts	$	(3,133)	$	(2,907)
Payments for lease buyouts		46		—
Changes in construction-in-progress payables		271		421
Total capital investments, excluding lease buyouts	$	(2,816)	$	(2,486)

Disclosure of cash flow information:
Cash paid during the year for net interest	$	150	$	380
Cash paid during the year for income taxes	$	526	$	579

The accompanying notes are an integral part of the Consolidated Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS’ EQUITY

(unaudited)


									Accumulated
				Additional					Other
	Common Stock			Paid-In		Treasury Stock			Comprehensive		Accumulated		Noncontrolling
(In millions, except per share amounts)	Shares	Amount		Capital		Shares	Amount		Income (Loss)		Earnings		Interest		Total
Balances at January 28, 2023	1,918	$	1,918	$	3,805	1,202	$	(20,650)	$	(632)	$	25,601	$	(28)	$	10,014
Issuance of common stock:
Stock options exercised	—		—		—	(1)		23		—		—		—		23
Restricted stock issued	—		—		(72)	(1)		30		—		—		—		(42)
Treasury stock activity:
Stock options exchanged	—		—		—	—		(29)		—		—		—		(29)
Share-based employee compensation	—		—		49	—		—		—		—		—		49
Other comprehensive income net of tax of $26	—		—		—	—		—		88		—		—		88
Other	—		—		44	—		(44)		—		—		3		3
Cash dividends declared ($0.26 per common share)	—		—		—	—		—		—		(188)		—		(188)
Net earnings including noncontrolling interests	—		—		—	—		—		—		962		—		962

Balances at May 20, 2023	1,918	$	1,918	$	3,826	1,200	$	(20,670)	$	(544)	$	26,375	$	(25)	$	10,880
Issuance of common stock:
Stock options exercised	—		—		—	(1)		13		—		—		—		13
Restricted stock issued	—		—		(85)	(1)		55		—		—		—		(30)
Treasury stock activity:
Stock options exchanged	—		—		—	—		(18)		—		—		—		(18)
Share-based employee compensation	—		—		43	—		—		—		—		—		43
Other comprehensive income net of tax of $32	—		—		—	—		—		104		—		—		104
Other	—		—		56	—		(56)		—		—		2		2
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(211)		—		(211)
Net earnings (loss) including noncontrolling interests	—		—		—	—		—		—		(180)		1		(179)

Balances at August 12, 2023	1,918	$	1,918	$	3,840	1,198	$	(20,676)	$	(440)	$	25,984	$	(22)	$	10,604
Issuance of common stock:
Stock options exercised	—		—		—	—		6		—		—		—		6
Restricted stock issued	—		—		(4)	—		—		—		—		—		(4)
Treasury stock activity:
Stock options exchanged	—		—		—	—		(7)		—		—		—		(7)
Share-based employee compensation	—		—		32	—		—		—		—		—		32
Other comprehensive income net of income tax of $36	—		—		—	—		—		119		—		—		119
Other	—		—		3	—		(3)		—		—		3		3
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(209)		—		(209)
Net earnings including noncontrolling interests	—		—		—	—		—		—		646		1		647

Balances at November 4, 2023	1,918	$	1,918	$	3,871	1,198	$	(20,680)	$	(321)	$	26,421	$	(18)	$	11,191
Issuance of common stock:
Stock options exercised	—		—		—	—		8		—		—		—		8
Restricted stock issued	—		—		(2)	(1)		3		—		—		—		1
Treasury stock activity:
Stock options exchanged	—		—		—	1		(8)		—		—		—		(8)
Share-based employee compensation	—		—		48	—		—		—		—		—		48
Other comprehensive income net of income tax of $(50)	—		—		—	—		—		(168)		—		—		(168)
Other	—		—		5	—		(5)		—		—		1		1
Cash dividends declared ($0.29 per common share)	—		—		—	—		—		—		(211)		—		(211)
Net earnings including noncontrolling interests	—		—		—	—		—		—		736

KROGER CO [KR] Filings
10-Q	[2024-12]
10-Q	[2024-09]
10-Q	[2024-06-28]
10-K	[2024-04-02]
10-Q	[2023-12-08]
10-Q	[2023-09-15]
10-Q	[2023-06-23]
10-K	[2023-03-28]
10-Q	[2022-12-09]
10-Q	[2022-09-16]
10-Q	[2022-06-24]
10-K	[2022-03-29]
10-Q	[2021-12-10]
10-Q	[2021-09-17]
10-Q	[2021-06-25]
10-K	[2021-03-30]
10-Q	[2020-12-15]
10-Q	[2020-09-22]
10-Q	[2020-06-26]
10-K	[2020-04-01]
10-Q	[2019-12-17]
10-Q	[2019-09-24]
10-Q	[2019-06-28]
10-K	[2019-04-02]
10-Q	[2018-12-18]
10-Q	[2018-09-25]
10-Q	[2018-06-29]
10-K	[2018-04-03]
10-Q	[2017-12-08]
10-Q	[2017-09-15]
10-Q	[2017-06-27]
10-K	[2017-03-28]
10-Q	[2016-12-13]
10-Q	[2016-09-20]
10-Q	[2016-06-28]
10-K	[2016-03-29]
10-Q	[2015-12-17]
10-Q	[2015-09-22]
10-Q	[2015-06-30]
10-K	[2015-03-31]
10-Q	[2014-12-16]
10-Q	[2014-09-23]
10-Q	[2014-07-01]
10-K	[2014-04-01]
10-Q	[2013-12-13]
10-Q	[2013-09-24]
10-Q	[2013-06-28]
10-K	[2013-04-02]
10-Q	[2012-12-11]
10-Q	[2012-09-18]
10-Q	[2012-06-26]
10-K	[2012-03-27]