The Kroger Co. today reported its first-quarter 2022 results and will update investors on how Leading with Fresh and Accelerating with Digital initiatives continue to position Kroger for long-term sustainable growth.

“Kroger achieved strong first-quarter results as we successfully executed on our strategy of Leading with Fresh and Accelerating with Digital. We are incredibly proud of our associates who continue to put the customer at the center of everything we do.

Our team is doing an outstanding job managing costs in an inflationary environment, which is allowing us to continue to invest in our associates while providing our customers the freshest food at affordable prices when and where they need it. We are delivering everyday value through personalized experiences, trusted Our Brands products, data-driven promotions, and seamless e-commerce solutions.

Looking ahead, we are well-positioned to continue delivering for our customers, investing in our associates, and driving sustainable returns for shareholders.” said Chairman and CEO Rodney McMullen.

First Quarter Highlights

• Identical Sales without fuel increased 4.1%
• Operating Profit of $1,505 million; Adjusted FIFO Operating Profit of $1,601 million
• EPS of $0.90; Adjusted EPS of $1.45
• Company is widening its competitive moats to deliver value for customers
• Fresh Department identical sales increased 5.2%
• Our Brands identical sales increased 6.3%
• Digitally engaged households grew by more than half a million and digital coupon downloads increased 11%

Total company sales were $44.6 billion in the first quarter, compared to $41.3 billion for the same period last year. Excluding fuel, sales increased 3.8% compared to the same period last year.

Gross margin was 21.6% of sales for the first quarter. The FIFO gross margin rate, excluding fuel, decreased 26 basis points compared to the same period last year. This decrease was primarily attributable to continued strategic price investments and higher supply chain costs offset by sourcing benefits and the cycling of a write-down related to a donation of personal protective equipment inventory from prior year.

CFO Gary Millerchip said “Our relentless focus on executing our strategy and sustained food at home trends led to a strong first quarter. The Kroger team is effectively navigating a dynamic retail environment. Our diverse and resilient business model gives us confidence to raise our full-year guidance. We now expect identical sales without fuel to be in the range of 2.5% to 3.5%, adjusted FIFO operating profit of $4.3 billion to $4.4 billion, and adjusted net earnings per diluted share to be in the range of $3.85 to $3.95. We remain confident in our ability to deliver sustainable earnings growth and total shareholder returns of 8-11% over time.“

First Quarter 2022 Highlights

Leading with Fresh

• Achieved the two highest single-day floral sales in Kroger history, led by Valentine’s Day and Mother’s Day and solidified the company’s place as the nation’s largest floral retailer
• Accelerated End-to-End Fresh Produce initiative with 355 new stores certified, driving higher fresh sales during the quarter
• Launched 239 new, seasonal Our Brands items, including fresh products to elevate summer cooking
• Unveiled a study completed with the University of Cincinnati and Kroger Health to understand how Kroger’s Food as Medicine platformand dietitians can support customers’ goals to incorporate more fresh foods and live healthier lives by leveraging technology, health education, and the OptUP shopping tool

Accelerating with Digital

• Opened two new Kroger Delivery facilities, powered by Ocado, in Dallas, Texas and Pleasant Prairie, Wisconsin allowing Kroger to serve fresh and affordable products directly to more households
• Expanded the Kroger Delivery network by opening three new spoke facilities, which serve as last-mile cross-dock locations, including Columbus and Louisville in existing geographies, as well as Miami, a new geography
• Introduced national e-commerce experience that expands Kroger’s Home and Baby offeringsby selling several thousand new products on Kroger’s Ship Marketplace in collaboration with Bed Bath & Beyond Inc.

Associate Experience

• Held nationwide hybrid hiring eventwith opportunities in retail, e-commerce, manufacturing, supply chain, merchandising, logistics, corporate, pharmacy, and healthcare roles
• Launched Microsoft Teams Rooms in supermarket locations to improve collaboration and training capabilities for associates
• Celebrated 45 associates who were recognized by Progressive Grocer to represent the Top Women in Grocery across three categories including, Senior-Level Executives, Rising Stars and Store Leaders
• Continued Kroger’s commitment to associate well-being by providing new training to more than 1,500 leaders to develop the skills needed to identify signs and symptoms of mental health problems, demonstrate support for associates experiencing a crisis, and guidance for self-care

Live Our Purpose

• Directed $210 million of $350 million in annual charitable giving to end hunger in our communities and gave a record one-year total of 546 million meals to people across the country while achieving 79% waste diversion from landfills company-wide
• Reduced barriers to COVID-19 treatmentoptions nationwide by supporting the “Test to Treat” initiative at The Little Clinic locations for patients exhibiting symptoms of COVID-19
• Announced new partnership with USOto bring mobile food programming to serve local military communities
• Ranked 25th on the 2022 Axios Harris Poll 100, an annual ranking of the reputations of the most visible U.S. companies