The Kroger Co KR
Q4 2012 Earnings Call Transcript

Transcript Call Date 03/07/2013

Operator: Good day, ladies and gentlemen, and welcome to the Q4 2012 The Kroger Co Earnings Conference Call. My name is Christy. I'll be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. As a reminder this call is being recorded for replay purposes.

I would now like to turn the call over to Ms. Cindy Holmes, Director of Investor Relation. Please proceed ma'am.

Cindy Holmes - IR: Thank you, Christy. 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, but Kroger assumes no obligation to update that information.

Both our fourth 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 topic with one question and one follow-up question if necessary.

I will now turn the call over to Dave Dillon, Chairman and Chief Executive Officer of Kroger.

David B. Dillon - Chairman and CEO: Thank you, Cindy. Good morning everyone and thank you for joining us today. With me to review Kroger's fourth quarter and full-year 2012 results are Rodney McMullen, Kroger's President and Chief Operating Officer; and Mike Schlotman, Senior Vice President and Chief Financial Officer.

Kroger had an outstanding fourth quarter and an outstanding year. We accomplished a lot in fiscal 2012. We delivered on ID sales growth. We exceeded expected earnings per share growth. We increased FIFO operating margin and we increased or dividend 30%. Kroger's unique value offering of better service, great products and enjoyable shopping experience and lower prices continues to resonate with a full range of customers. The result was an industry-leading 37 consecutive quarters of positive identical sales growth.

In this morning's press release, we provided you with details to make it easier for you to do an apples-to-apples comparison and understand how we look at our business internal. Table 6 under press release was designed to help you understand the details behind the growth figures we reported. We delivered value to shareholders by increasing our dividend and exceeding our own earnings per share guidance with the combination of solid operating results and share buyback. We returned more than $1.5 billion to shareholders through dividends and stock buyback in 2012. Our associates delivered an outstanding year that underscores Kroger’s growing connection with customers remains the key to shareholder value creation. In a moment, Rodney will outline how we got there and Mike will discuss the numbers.

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