What's Inside

On November 5, Kroger hosted its 2019 analyst day.

• Management noted the benefit of “incrementaility” from digital channels: Over 50% of Kroger’s revenue from delivery and pickup services comes from competitors. And, as customers shop across more modalities (channels), they bring more sales from rivals to Kroger.
• CEO Rodney McMullen said Kroger’s aspiration is to generate a strong, attractive shareholder return. This is underpinned by a stable and growing core grocery business, complemented with asset-light alternative profit streams combined with a focus on high-return capital investments.
• For FY20, management guided for adjusted earnings per share (EPS) of $2.30-2.40 versus the FactSet consensus of $2.30; identical-store sales growth of more than 2.25%; and, alternative profit businesses to grow incremental operating profit in the range of $125 million to $150 million.