Key Takeaways From The Kroger’s Management Meeting

Deutsche Bank analysts provide a review on The Kroger Co. (NYSE:KR) following their meetings with the company’s management, including SVP and CFO Gary Millerchip, SVP and Chief Merchandising & Marketing Officer Stuart Aitken, and Senior Director of Investor Relations Rob Quast.

According to the analysts, the tone from the top was overall positive, which does not come as a surprise given strong Q3 results and guidance raise just two weeks ago. Also not surprisingly, the health of the consumer and inflation dominated investor conversations with questions around trade down, private label, unit elasticity, and P&L implications from moderating inflation.

But specifically, the key message was that the company is focused on generating its long-term 8%-11% TSR algorithm that consists of 3%-5% EPS growth and 5%-6% contribution from share buybacks/dividends.

While next year will have a number of puts and takes, the analyst noted that management believes it can sustain recent share gains as it focuses on its strategic initiatives and leverages its broad assortment across all price points, attracting both high- and lower-income households.