Q2 2024 Kroger Co Earnings Call Transcript
Key Points
- The Kroger Co (KR) achieved identical sales without fuel growth of 1.2%, supported by positive customer metric trends.
- Digital sales grew 11%, driven by an increase in both households and traffic, with e-commerce households growing 14%.
- Our Brands sales growth outpaced national brand sales growth, with more than 90% of customer households purchasing Our Brands products.
- The company raised its quarterly dividend by 10%, marking the 18th consecutive year of dividend increases.
- Kroger's net total debt to adjusted EBITDA ratio was 1.24, indicating a strong balance sheet and financial flexibility.
- Customers are adjusting to economic pressures, leading to reduced spending and a focus on essentials, impacting overall sales.
- The OG&A rate, excluding fuel and adjustment items, was 65 basis points unfavorable to last year due to non-recurring charges.
- Shrink related to theft remains high on a historical basis, despite improvements in Fresh shrink.
- Adjusted EPS declined by 3% compared to last year, reflecting challenges in maintaining profitability.
- The company faces ongoing labor negotiations and strikes, which could impact operations and labor costs.
Good morning, and welcome to the Kroger Co. Second Quarter 2024 Earnings Conference Call. (Operator Instructions) Please note, this event is being recorded.
I'd now like to turn the conference over to Rob Quast, Senior Director, Investor Relations. Please go ahead.
Good morning. Thank you for joining us for Kroger's second quarter 2024 earnings call. I am joined today by Kroger's Chairman and Chief Executive Officer, Rodney McMullen; and Interim Chief Financial Officer, Todd Foley.
Before we begin, I want to remind you that today's discussions will include forward-looking statements. We want to caution you that such statements are predictions, and actual events or results can differ materially. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings. The Kroger Company assumes no obligation to update that information.
After our prepared remarks, we look forward to taking your
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