The Kroger Co. (NYSE:KR) Q2 2018 Earnings Conference Call Transcript

Sep 13, 2018 • 10:00 am ET

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The Kroger Co. (NYSE:KR) Q2 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning, and welcome to the Kroger Company Second Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation there will be an opportunity to ask questions. (Operator Instructions) Please note, this event is being recorded.

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

Executive
Rebekah Manis

Thank you, Gary. Good morning, and thank you for joining us.

(Forward-Looking Cautionary Statements)

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.

Please save the date for our 2018 Investor Conference, which we will hold in Cincinnati on October 29 and October 30. Details will be coming soon and we hope you can join us.

I will now turn the call over to Kroger's Chairman and CEO, Rodney McMullen.

Executive
Rodney McMullen

Thank you, Rebekah. Good morning, everyone, and thank you for joining us. With me to review Kroger's second quarter 2018 results is EVP and CFO, Mike Schlotman. Restock Kroger is designed to reposition our core business by 2020, so we can achieve our long-term vision to serve America through food inspiration and uplift.

We outlined the four main drivers of our plan last October. First, redefine the grocery customer experience; second, partner for customer value; third, develop talent; and fourth, live our purpose. Delivering on our objectives under each of these areas between now and 2020 will generate incremental operating margin dollars and free cash flow to create shareholder value. And while we are only two quarters into our three-year plan, we are making solid progress. More importantly, I want to help you understand how all the steps we take today and in the future are set in motion with clear strategic intent in line with our vision. Everything we are doing is intended to create a truly seamless shopping experience, so we can serve customers anything, anytime and anywhere.

As we create a seamless experience, we'll use our data to provide convenient and personalized food inspiration to help customers to be the hero to their families at mealtime, every time. You can see this through our exclusive arrangement to bring Ocado's smart platform to the US and in our recent launch of Ship, Kroger's new direct-to-customer shipping platform, and in our continued expansion in home delivery including our driverless delivery test with Nuro. You can also see this in our merger with Home Chef, part of what makes our merger so exciting is their data-driven and customer-centered approach to menu creation and meal solution development. Home Chef is accelerating our ability to deliver convenience, simplicity and a personalized food experience.

We are also building an expansive network of innovative partnerships to create new customer value. Alternative revenue streams will expand and enhance our strong core business and increase profitability. Partnering with