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Kroger Annual Report, Year Ended Feb 1, 2003

Filing Date
Filed May 2, 2003
Period End
February 1, 2003
Security
KR
In the record · 2016–202610-K1210-Q328-K137

KR filed 12 annual reports (10-K), 32 quarterly reports (10-Q) and 137 current reports (8-K) between 2016 and 2026.

  1. Leadership change8-K · Oct ’17Oct ’17
  2. Leadership change8-K · Dec ’19Dec ’19
  3. FY2022 annual report10-K · Mar ’22Mar ’22
  4. Impairment8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed May 2, 2003. Cited figures are marked; the original filing is the authoritative source.

The Kroger Co. reported net earnings of $1.205 billiona, or $1.52 per diluted share, for the fiscal year ended February 1, 2003, on sales of $51.76 billion, up from $50.10 billion in fiscal 2001.

Net earnings included after-tax significant items totaling $87 millionb, including a $16 million after-tax cumulative effect of an accounting change tied to writing off jewelry store division goodwill. Identical food store sales, including supermarket fuel centers, were flat in 2002, and management attributed the soft top line to deflation in various commodity groups, a weak economy, war fears and increased competition, partly offset by price reductions under its Strategic Growth Plan. Cash from operations rose to $3.2 billion from $2.3 billion, and the company used the cash to reduce debt.

Total debt fell $256 million to $8.6 billionc, and net total debt, as the company defines it, was $8.1 billion. Capital expenditures excluding acquisitions were $1.9 billion. The company repurchased $785 million of treasury stock in 2002 and paid no cash dividends in fiscal 2002.

Management estimates 2003 earnings per share of $1.63d and expects identical food store sales including fuel to be positive. It also expects to exceed its original goal of $500 million in cost reductions under the Strategic Growth Plan by the end of fiscal 2003, with $306 million achieved as of February 1, 2003. Key risks include the pending Santee Dairies lawsuit, UFCW contract expirations in fiscal 2003, rising health care and pension costs, and an unrated commercial paper program tied to a BBB-/Baa3 credit rating.

02—Key points

Key Highlights

  1. Net earnings of $1.205 billion, or $1.52 per diluted share, for fiscal 2002, versus $1.26 per diluted share in fiscal 2001.
  2. Sales of $51.76 billion, up from $50.10 billion in fiscal 2001; identical food store sales were flat in 2002.
  3. Cash from operations of $3.2 billion, up from $2.3 billion, used to reduce total debt by $256 million to $8.6 billion.
  4. Strategic Growth Plan reduced costs by approximately $306 million as of February 1, 2003, with the company expecting to exceed its original $500 million goal by the end of fiscal 2003.
  5. Management estimates 2003 diluted EPS of $1.63, including about $0.02 per share of expense for systems conversions and division consolidation.
  6. Repurchased $785 million of treasury stock in 2002 and paid no cash dividends; a new $500 million repurchase program was authorized December 10, 2002, with $63 million used in 2002.
  7. Credit rating of BBB-/Baa3 is noted as a factor that could affect the cost and availability of commercial paper borrowings.

03—Questions

Frequently Asked Questions

  1. How did Kroger perform financially in fiscal 2002?

    Sales rose to $51.76 billion from $50.10 billion, and net earnings were $1.205 billion, or $1.52 per diluted share, compared with $1.26 per diluted share in fiscal 2001. After-tax significant items reduced earnings by $87 million, including a $16 million after-tax cumulative effect of an accounting change.

  2. Why were identical food store sales flat?

    The company cited deflation in various commodity groups, a weak economy, war fears and increased competition. It said the effects of the weak economy and increased competition partially offset the benefits of price reductions under its Strategic Growth Plan.

  3. What is Kroger's outlook for 2003?

    The company estimates 2003 earnings per share of $1.63 and expects identical food store sales, including fuel, to be positive. It expects interest expense of $575 million to $595 million and depreciation of $1,175 million to $1,200 million, and plans about $2.0 billion in capital spending.

  4. What are the main risks identified in the filing?

    Risks include intense grocery competition, including from non-traditional retailers; UFCW contract expirations in fiscal 2003 with possible work stoppages; rising health care and pension costs; a lawsuit from the other partner in Santee Dairies claiming Kroger must buy all its fluid milk requirements from Santee; and a potential rating downgrade affecting commercial paper access.

  5. How did Kroger use its cash and capital in 2002?

    Operating cash flow of $3.2 billion funded $1.9 billion of capital expenditures excluding acquisitions and reduced total debt by $256 million. The company also made $785 million of treasury stock purchases and spent $126 million on acquisitions.

04—Continue

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