The Kroger Co. (NYSE:KR) Q2 2019 Earnings Conference Call Transcript

Sep 12, 2019 • 10:00 am ET

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The Kroger Co. (NYSE:KR) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to the Kroger Company Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

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. 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 assumes no obligation to update that information. Both our second quarter press release and our prepared remarks from this conference call will be available on our website at ir.kroger.com.

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. In addition, please save the day for our 2019 investor conference, which will be held in New York City on November 5th. Further details will be shared soon and we hope you can join us.

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

Executive
W. Rodney McMullen

Thank you, Rebekah. Good morning, everyone, and thank you for joining us. Let's meet today to review Kroger's second quarter 2019 results, it's Chief Financial Officer, Gary Millerchip. Kroger is focused on executing the second year of our Restock Kroger plan to generate shareholder value by serving America through food inspiration and uplift. Restock Kroger has four main drivers, redefine the grocery customer experience, partner for customer value, develop talent and live our purpose. Combined, these drivers come together to create shareholder value. We are halfway through the second year of our three-year plan.

We continue making strategic investments to reposition the Company for the future, while continuing to grow and deliver today. We started this conversation the last two quarters by acknowledging we had our work cut out for us. As always, we remain energized by that challenge. While we're always continually driving for improvements, there are several examples in our second quarter results that reflect the disciplined focus of Restock Kroger blueprint is paying off. Guided by our customer obsession, Kroger delivered our best identical sales results since the launch of a transformational plan. Our internal customer measures are improving even faster than our identical sales growth. There is always a lag between improving the customer experience and when the customer will reward us.

Some other positive trends during the second quarter include FIFO operating margin that was stable and our supermarket business excluding fuel and pharmacy. 15 of our divisions had increasingly -- increasing supermarket identical sales without fuel, compared to the first quarter. We continue to reduce cost. We are on track to deliver