KROGER CO [KR] Filings

10-Q 1 kr-20240817x10q.htm 10-Q

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 August 17, 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 723,486,278 shares of Common Stock ($1 par value) outstanding as of September 17, 2024.

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

THE KROGER CO.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)


	Second Quarter Ended				Two Quarters Ended
	August 17,		August 12,		August 17,		August 12,
(In millions, except per share amounts)	2024		2023		2024		2023
Sales	$	33,912	$	33,853	$	79,181	$	79,018

Operating expenses
Merchandise costs, including advertising, warehousing, and transportation, excluding items shown separately below		26,261		26,475		61,385		61,555
Operating, general and administrative		5,886		6,935		13,490		14,328
Rent		199		206		469		470
Depreciation and amortization		751		716		1,728		1,674

Operating profit (loss)		815		(479)		2,109		991

Other income (expense)
Interest expense		(84)		(93)		(207)		(247)
Non-service component of company-sponsored pension plan benefits		3		8		6		17
(Loss) gain on investments		(121)		367		(105)		290

Net earnings (loss) before income tax expense		613		(197)		1,803		1,051

Income tax expense (benefit)		148		(18)		382		268

Net earnings (loss) including noncontrolling interests		465		(179)		1,421		783
Net income (loss) attributable to noncontrolling interests		(1)		1		8		1

Net earnings (loss) attributable to The Kroger Co.	$	466	$	(180)	$	1,413	$	782

Net earnings (loss) attributable to The Kroger Co. per basic common share	$	0.64	$	(0.25)	$	1.94	$	1.08

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

Net earnings (loss) attributable to The Kroger Co. per diluted common share	$	0.64	$	(0.25)	$	1.93	$	1.07

Average number of common shares used in diluted calculation		727		719		728		725

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

THE KROGER CO.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)


	Second Quarter Ended				Two Quarters Ended
	August 17,		August 12,		August 17,		August 12,
(In millions)	2024		2023		2024		2023
Net earnings (loss) including noncontrolling interests	$	465	$	(179)	$	1,421	$	783

Other comprehensive (loss) income
Change in pension and other postretirement defined benefit plans, net of income tax⁽¹⁾		—		(3)		(2)		(7)
Unrealized gains and losses on cash flow hedging activities, net of income tax⁽²⁾		(123)		105		(53)		196
Amortization of unrealized gains and losses on cash flow hedging activities, net of income tax⁽³⁾		2		2		4		3

Total other comprehensive (loss) income		(121)		104		(51)		192

Comprehensive income (loss)		344		(75)		1,370		975
Comprehensive (loss) income attributable to noncontrolling interests		(1)		1		8		1
Comprehensive income (loss) attributable to The Kroger Co.	$	345	$	(76)	$	1,362	$	974

(1)	Amount is net of tax of $(1) for the second quarters of 2024 and 2023. Amount is net of tax of $(1) for the first two quarters of 2024 and $(2) for the first two quarters of 2023.

(2)	Amount is net of tax of $(37) for the second quarter of 2024 and $33 for the second quarter of 2023. Amount is net of tax of $(16) for the first two quarters of 2024 and $59 for the first two quarters of 2023.

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

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

THE KROGER CO.

CONSOLIDATED BALANCE SHEETS

(unaudited)


	August 17,		February 3,
(In millions, except par amounts)	2024		2024
ASSETS
Current assets
Cash and temporary cash investments	$	2,786	$	1,883
Store deposits in-transit		1,091		1,215
Receivables		2,149		2,136
FIFO inventory		9,014		9,414
LIFO reserve		(2,371)		(2,309)
Assets held for sale		589		—
Prepaid and other current assets		805		609
Total current assets		14,063		12,948

Property, plant and equipment, net		25,708		25,230
Operating lease assets		6,786		6,692
Intangibles, net		866		899
Goodwill		2,673		2,916
Other assets		1,347		1,820

Total Assets	$	51,443	$	50,505

LIABILITIES
Current liabilities
Current portion of long-term debt including obligations under finance leases	$	196	$	198
Current portion of operating lease liabilities		666		670
Accounts payable		10,344		10,381
Accrued salaries and wages		1,261		1,323
Liabilities held for sale		192		—
Other current liabilities		3,473		3,486
Total current liabilities		16,132		16,058

Long-term debt including obligations under finance leases		12,034		12,028
Noncurrent operating lease liabilities		6,485		6,351
Deferred income taxes		1,531		1,579
Pension and postretirement benefit obligations		377		385
Other long-term liabilities		2,372		2,503

Total Liabilities		38,931		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		3,987		3,922
Accumulated other comprehensive loss		(540)		(489)
Accumulated earnings		27,917		26,946
Common shares in treasury, at cost, 1,194 shares in 2024 and 1,198 shares in 2023		(20,764)		(20,682)

Total Shareowners’ Equity - The Kroger Co.		12,518		11,615
Noncontrolling interests		(6)		(14)

Total Equity		12,512		11,601

Total Liabilities and Equity	$	51,443	$	50,505

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

THE KROGER CO.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Two Quarters Ended
	August 17,		August 12,
(In millions)	2024		2023
Cash Flows from Operating Activities:
Net earnings including noncontrolling interests	$	1,421	$	783
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities:
Depreciation and amortization		1,728		1,674
Operating lease asset amortization		327		330
LIFO charge		62		102
Share-based employee compensation		89		92
Deferred income taxes		(31)		(278)
Gain on the sale of assets		(9)		(43)
Loss (gain) on investments		105		(290)
Other		41		78
Changes in operating assets and liabilities:
Store deposits in-transit		124		(14)
Receivables		(256)		227
Inventories		271		630
Prepaid and other current assets		(202)		68
Accounts payable		176		403
Accrued expenses		(74)		(359)
Income taxes receivable and payable		95		252
Operating lease liabilities		(296)		(378)
Other		(107)		1,087

Net cash provided by operating activities		3,464		4,364

Cash Flows from Investing Activities:
Payments for property and equipment, including payments for lease buyouts		(2,179)		(1,954)
Proceeds from sale of assets		309		89
Other		(35)		70

Net cash used by investing activities		(1,905)		(1,795)

Cash Flows from Financing Activities:
Payments on long-term debt including obligations under finance leases		(99)		(708)
Dividends paid		(420)		(376)
Proceeds from issuance of capital stock		93		36
Treasury stock purchases		(116)		(47)
Other		(100)		(69)

Net cash used by financing activities		(642)		(1,164)

Net increase in cash and temporary cash investments		917		1,405

Cash and temporary cash investments:
Beginning of year		1,883		1,015
End of period see Note 9	$	2,800	$	2,420

Reconciliation of capital investments:
Payments for property and equipment, including payments for lease buyouts	$	(2,179)	$	(1,954)
Payments for lease buyouts		46		—
Changes in construction-in-progress payables		57		183
Total capital investments, excluding lease buyouts	$	(2,076)	$	(1,771)

Disclosure of cash flow information:
Cash paid during the year for interest	$	192	$	308
Cash paid during the year for income taxes	$	197	$	290

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		3		739

Balances at February 3, 2024	1,918

KROGER CO [KR] Filings
10-Q	[2024-09-20]
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]