The Kroger Co. (NYSE:KR) Q1 2016 Earnings Conference Call - Final Transcript

Jun 16, 2016 • 10:00 am ET


The Kroger Co. (NYSE:KR) Q1 2016 Earnings Conference Call - Final Transcript


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Good morning and welcome to the Kroger Company First Quarter Earnings Conference Call.(Operator Instructions) Please note this event is being recorded.

I would now like to turn the conference over to Kate Ward, Director of Investor Relations. Please go ahead.

Kate Ward

Thanks, Laura. Good morning and thank you for joining us.

(Forward-Looking Cautionary Statements)

Both our first quarter press release and our prepared remarks from this conference call will be available on our website at

After our prepared remarks, we look forward to taking your questions. In order to cover a broad range of topics from as many of you as we can, we ask that you please limit yourself to one question and one follow-up question if necessary.

Thank you. I will now turn the call over to Kroger's Chairman and Chief Executive Officer, Rodney McMullen.

Rodney McMullen

Thank you, Kate; and good morning, everyone; and thank you for joining us today. With me to review Kroger's first quarter results is Executive Vice President and Chief Financial Officer, Mike Schlotman.

Our associates delivered another solid quarter. We continue to execute our growth plan and to deliver on our financial performance commitments. Most importantly, we continue to strengthen our connection with our customers, growing loyalty and market share and achieving Kroger's 50th consecutive quarter of positive identical supermarket sales growth, excluding fuel. Most companies can only aspire to achieve these results. It says a lot about our consistently remarkable performance and our ability to grow in a balanced way with a long-term focus.

We've managed through nearly every conceivable operating environment and demonstrated through different cycles that by providing value to our customers and partnering with our associates, we will continue to make a difference for our customers, associates and communities. And when we do that, we create value for shareholders, as evidenced by our growing dividend and our consistent net earnings per diluted share growth above our long-term guidance of 8% to 11%. In fact, our net earnings per diluted share growth rate on a compounded annual basis was 14.1% for three years and 18.8% for five years.

We demonstrate our long-term focus by continuing to invest for the future. We are making investments in our people, our digital and online capabilities, and our strategic partnerships. Across the board, Kroger has an incredibly strong management team and a deep bench of leaders who are making us better every day. We continue to make strategic investments in leadership development and training for all of our associates, including high-volume store managers and future senior leaders.

Many people come here for a job and Kroger creates opportunities for all associates to build a career. Despite record-low unemployment figures, when we held a one-day hiring event in every supermarket location in May, we received more than 116,000 applications. From that pool, we hired more than 12,000 new associates. We see our opportunity culture as a competitive advantage.We are expanding our digital presence and marching steadily toward a time when we can provide our customers with anything,