The Kroger Co. (NYSE:KR) Q3 2020 Earnings Conference Call - Final Transcript

Dec 03, 2020 • 10:00 am ET


The Kroger Co. (NYSE:KR) Q3 2020 Earnings Conference Call - Final Transcript


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Good morning, and welcome to The Kroger Company Third Quarter 2020 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions]

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

Rebekah Manis

Thank you, Gary. Good morning, and thank you for joining us. Before we begin, I want to remind you that today's discussion 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 third 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.

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

W. Rodney McMullen

Thank you, Rebekah. Good morning, everyone, and thank you for joining us. With me, today to review Kroger's third quarter 2020 results is Chief Financial Officer, Gary Millerchip.

When restrictions were set in place to address the spread of COVID-19 in mid-March, many underestimated the length of time that it would last, and the number of families and communities that would be impacted. Many of the stories from the last nine months have been upsetting to say the least. Out of this grief, we've also seen the best parts of human nature.

From our store teams to our warehouse associates and drivers and our digital teams, plants and offices, our Kroger family of associates have been nothing short of incredible during this period. I am proud of our dedicated associates, who have continued to diligently execute our Restock Kroger transformation, while serving our customers when they need us most.

We delivered strong results in the third quarter. Customers are at the center of everything we do and sales remain elevated and we continue to grow market share, as we enhance our competitive moats, Fresh, Our Brands, Data & Personalization and Seamless.

I want to highlight that Kroger's digital sales are incrementally profitable today, partly supported by our rapidly growing digital media business, and partially fueled by our constant improvement in operational efficiency. This is true as the incremental pass-through rate of sales, and we have a clear path to continue improving digital profitability. Gary will touch on this more in a few minutes, but I wanted to call this out as well because it demonstrates the strength of not only our seamless offering, but the overall Kroger ecosystem and how the components parts fit together to deliver value to our customers