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| KR > SEC Filings for KR > Form 8-K on 15-Oct-2008 | All Recent SEC Filings |
15-Oct-2008
Regulation FD Disclosure, Other Events, Financial Statements and Exhibits
On October 15 and 16, 2008, The Kroger Co. will be hosting an analyst conference. In anticipation of questions regarding Kroger's liquidity, sales trends, earnings and other guidance, Kroger provides, and files herewith, the following updated guidance:
2008 Guidance Excluding, Except as to Sales, Effect of Hurricane Ike:
Annual identical supermarket sales growth
(excluding fuel sales and including
stores affected by Hurricane Ike and its
remnants, for both 2007 and 2008) - 4.5 - 5.5%
Third quarter 2008 identical supermarket Through first eight weeks,
sales growth (excluding fuel sales and continues to trend above 5%. Sales
including stores affected by Hurricane in the second four weeks of the
Ike and its remnants, for both 2007 and quarter were stronger than sales in
2008) - the first four weeks of the
quarter.
Annual net earnings per diluted share - $1.85 - $1.90, excluding the effect
of Hurricane Ike and its remnants
Third and fourth quarter 2008 net We anticipate Kroger's lowest
earnings per diluted share - year-over-year earnings per share
growth rate will occur in the third
quarter. Third quarter results in
2007 included a $40 million tax
benefit. The net effect on our
third quarter results was income of
approximately $0.02 to $0.03 per
diluted share. We expect earnings
per share in the third quarter 2008
will range from slightly below to
slightly above prior year results.
After adjusting for the prior year
net benefit, this would represent
an increase in 2008's expected
third quarter earnings per share.
We continue to expect that our
fourth quarter 2008 EPS growth rate
will be higher than our annual EPS
growth rate
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Annual operating margin - flat to slightly improving
Liquidity - Kroger's $2.5 billion committed
five-year credit facility, maturing
November 2011, continues to remain
available and Kroger has drawn
under this facility, as necessary,
since its inception and including
since the end of the second quarter
2008. Letters of credit totaling
$365 million as of both August 16,
2008, and October 14, 2008, reduce
amounts available under the credit
facility. On peak borrowing days,
we expect that more than $1.2
billion of this facility would
remain available. In addition,
Kroger maintains uncommitted money
market lines totaling $75 million.
Annual capital expenditures - $2.0 - $2.2 billion, excluding
acquisitions. These capital
projects include approximately 70 -
80 major store projects covering
new stores, expansions and
relocations, and 175 - 200
remodels, logistics projects, and
other investments to support our
Customer 1st business strategy.
Annual supermarket square footage growth - 2.0 - 2.5% before acquisitions and
operational closings, with an
emphasis on large, fast-growing
markets
Annual expected tax rate - approximately 37.0%
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Labor:
We have negotiations this year covering store associates in Las Vegas, Phoenix, and Portland. Negotiations this year will be challenging as we must have competitive cost structures in each market while meeting our associates' needs for good wages and affordable health care.
Our ability to achieve sales and earnings per share goals may be affected by:
labor disputes, particularly as the Company seeks to manage health care and
pension costs; industry consolidation; pricing and promotional activities of
existing and new competitors, including non-traditional competitors; our
response to these actions; the state of the economy, including interest rates
and the inflationary and deflationary trends in certain commodities; weather
conditions, including the effect of Hurricane Ike and its remnants; stock
repurchases; the success of our future growth plans; goodwill impairment; and
our ability to generate sales at desirable margins, as well as the success of
our programs designed to increase our identical sales without fuel. In
addition, any delays in opening new stores, or changes in the economic climate,
could cause us to fall short of our sales and earnings targets. Our ability to
increase identical supermarket sales could be adversely affected by increased
competition and sales shifts to other stores that we operate, as well as
increases in sales of our corporate brand products.
Our guidance assumes that the Company's fuel margins in 2008 will be comparable to those achieved in 2007. Our liquidity could be affected if our committed lenders are unable or unwilling to honor their contractual obligations to us. Our capital expenditures, and the number of projects that we complete, could vary from our expectations if we are unsuccessful in acquiring suitable sites for new stores; development costs exceed those budgeted; or our logistics and technology or store projects are not completed on budget or in the time frame expected. Square footage growth during the year is dependent upon our ability to acquire desirable sites for construction of new facilities, as well as the timing of completion of projects. Any change in tax laws, the regulations related thereto, the applicable accounting rules or standards, or the interpretation thereof by federal, state or local authorities could affect our expected tax rate.
On October 15, 2008, the Company issued a press release, a copy of which is attached hereto as Exhibit 99.1, and filed herewith.
(d) Exhibits.
99.1 Press release issued by the Company on October 15, 2008, filed herewith.
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