UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: March 11, 2003
THE KROGER CO.
(Exact name of registrant as specified in its charter)
An Ohio Corporation No. 1-303 31-0345740
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Number)
1014 Vine Street
Cincinnati, OH 45201
(Address of principal
executive offices)
Registrant's telephone number: (513) 762-4000
Item 5. Other Events
On March 11, 2003, the Company released its earnings for the fourth
quarter of 2002 and for fiscal year 2002. Attached hereto as Exhibit
99.1 is the text of that release.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits:
99.1 Earnings release for fourth quarter 2002 and fiscal year
2002.
Item 9. Regulation FD Disclosure
2003 Guidance:
Economic and competitive
environment - Unchanged
Earnings per diluted share - $1.63, including $0.02 of expense
for systems conversion and
consolidation of Michigan and
Columbus divisions
Square footage growth - 2.5-3.0%, excluding acquisitions
and operational closings
Identical store sales growth goal
(including supermarket fuel sales) - Positive for the year
Capital expenditures - $2.0 billion, excluding
acquisitions and the final
synthetic lease buyout
Depreciation - $1,175-1,200 million
Interest expense - $575-595 million, based on the
current interest rate
environment
Diluted shares outstanding - Beginning of 2003 = 770 million
End of 2003 = 755 million
Average outstanding
for the year = 763 million
OG&A - Increase 40-50 basis points
FIFO gross profit - Increase 20-30 basis points
LIFO - $35 million charge
Net operating working
capital reduction - $100 million
Tax rate - 37.5%
Inflation estimate - 0%
New, relocated or
expanded stores - 100-110, excluding acquisitions
Remodels - 160-200
Supermarket fuel stations - 100-110
Pension discount rate - 6.75%
Pension assumed rate of return - 8.50%
Labor:
During fiscal 2003, UFCW collective bargaining agreements will
expire in Toledo, Peoria, Portland, Memphis, Southern California,
Charleston, WV, Arizona, and Indianapolis, among other labor
agreements expiring this year.
Our ability to achieve the expected increases in sales and earnings could be
adversely affected by the competitive environment in which we operate. In
addition any labor dispute, delays in opening new stores, or changes in the
economic climate could cause us to fall short of our sales and earnings targets.
In addition, increases in sales of our corporate brand products and the "sister
store" impact of our new store openings, could adversely affect identical store
sales. Our ability to increase same store sales could be adversely affected by
increased competition and sales shifts to other stores that we operate. Our
capital expenditures could vary if we are unsuccessful in acquiring suitable
sites for new stores, if development costs exceed those budgeted, or if our
logistics and technology projects are not completed in the time frame expected
or on budget. Our ability to meet working capital reduction targets could be
adversely affected by increases in product costs, newly opened or consolidated
distribution centers, our ability to achieve sales growth from new square
footage, competitive activity in the markets in which we operate, changes in our
product mix, and changes in laws and regulations. Square footage growth and the
number of store projects completed during the year are dependent upon our
ability to acquire desirable sites for construction of new facilities, as well
as the timing of completion of projects. Depreciation and amortization may vary
from our estimates due to the timing of new store openings. Interest expense
will vary with changes in capital markets and the amount of debt that we have
outstanding. LIFO will be affected by vendor promotions and changes in the cost
of inventory. While we expect to achieve benefits through logistics and
technology, development of new systems and integration of systems due to our
merger with Fred Meyer carry inherent uncertainties, and we may not achieve the
expected benefits. Unforeseen difficulties in integrating any acquired entity
with Kroger could adversely affect our ability to meet our other expectations.
The average diluted shares outstanding may vary based on the market price of our
stock, the number of shares we repurchase and the number of stock awards made
during the year. The amount and timing of future one-time, merger-related costs
could be adversely affected by our ability to convert remaining systems as
planned and on budget. The cost associated with implementation of our strategic
growth plan, as well as the amount and timing of our expected cost reductions,
could be affected by a worsening economy, increased competitive pressures, and
any inability on our part to implement the strategic growth plan when expected.
Any change in tax laws, the regulations related thereto, or the interpretation
thereof by federal, state or local authorities could affect our expected tax
rate.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereto duly authorized.
THE KROGER CO.
March 11, 2003 By: (Paul Heldman)
Paul Heldman
Senior Vice President, Secretary
and General Counsel
EXHIBIT INDEX
Exhibit No. Exhibit
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99.1 Earnings release for fourth quarter 2002 and fiscal year 2002.