克羅格 (KR) 2021 Q2 法說會逐字稿

Good day, and welcome to The Kroger Co. second quarter earnings call. (Operator Instructions) Please note, this event is being recorded.

美好的一天，歡迎來到克羅格公司第二季度財報電話會議。 （操作員說明）請注意，此事件正在記錄中。

I would now like to turn the conference over to Rob Quast. Please go ahead.

我現在想把會議交給 Rob Quast。請繼續。

Thank you, Sarah. Good morning. Thank you for joining us for Kroger's Second Quarter 2021 Earnings Call. I am excited to be here today and look forward to working with all of you in my new role as Head of Investor Relations. I am joined today by Kroger's Chairman and Chief Executive Officer, Rodney McMullen; and Chief Financial Officer, Gary Millerchip.

謝謝你，莎拉。早上好。感謝您加入我們參加克羅格 2021 年第二季度財報電話會議。我很高興今天來到這裡，並期待在我擔任投資者關係主管的新職位上與大家一起工作。今天，克羅格的董事長兼首席執行官羅德尼·麥克馬倫 (Rodney McMullen) 加入了我的行列；和首席財務官 Gary Millerchip。

Before we begin, I want to remind you that today's discussions will include forward-looking statements. We want to caution you that such statements are predictions, and actual events or results can differ materially. A detailed discussion of the many factors that we believe may have a material effect on our business on an ongoing basis is contained in our SEC filings. The Kroger co. assumes no obligation to update that information. Our press release and supplemental information regarding the quarter can be found on our website at ir.kroger.com.

在開始之前，我想提醒您，今天的討論將包括前瞻性陳述。我們想提醒您，此類陳述是預測，實際事件或結果可能存在重大差異。我們認為可能對我們的業務持續產生重大影響的許多因素的詳細討論包含在我們提交給美國證券交易委員會的文件中。克羅格公司不承擔更新該信息的義務。可以在我們的網站 ir.kroger.com 上找到我們關於本季度的新聞稿和補充信息。

After our prepared remarks, we look forward to taking your questions.

在我們準備好發言之後，我們期待著回答您的問題。

I will now turn the call over to Rodney.

我現在將把電話轉給羅德尼。

Thank you, Rob, and congratulations on your new role. I would also like to take a minute to thank Rebekah Manis for her service to the IR team. We wish her continued success in her new role as Head of New Geographies for our customer fulfillment centers. Finally, I would like to thank you all for joining us today.

謝謝你，Rob，並祝賀你擔任新角色。我還要花一點時間感謝 Rebekah Manis 為 IR 團隊提供的服務。我們祝愿她在擔任我們客戶履行中心新地區主管的新職位上繼續取得成功。最後，我要感謝大家今天加入我們。

Our associates have done an incredible job operating our stores, pharmacies, supply chain and manufacturing facilities through the COVID environment. Their unending commitment to serving our customers and communities continues to make a difference in Kroger's second quarter identical sales without fuel grew 14% on a 2-year stacked basis, ahead of our internal expectations. We saw triple-digit growth in digital over the same time period and continue to drive costs out of the business through cost-saving initiatives and operational efficiencies. We remain confident in our positioning and our ability to deliver consistently attractive total shareholder returns of 8% to 11% over time.

在 COVID 環境下，我們的員工在經營我們的商店、藥店、供應鍊和製造設施方面做得非常出色。他們對服務我們的客戶和社區的無休止承諾繼續使克羅格第二季度無燃料的相同銷售額在兩年內增長了 14%，超出了我們的內部預期。我們在同一時期看到了三位數的數字增長，並通過節省成本的舉措和運營效率繼續降低業務成本。我們仍然對我們的定位以及我們持續提供具有吸引力的 8% 至 11% 的總股東回報的能力充滿信心。

I'd like to spend the next few minutes discussing 3 key areas: first, customer behavior and how our seamless ecosystem is working; second, I'll share examples of how we are leading with fresh and accelerating with digital; and finally, I will highlight how we continue to live our purpose to feed the human spirit through the associate experience and our work to advance Kroger's ESG commitments.

我想在接下來的幾分鐘討論三個關鍵領域：第一，客戶行為以及我們無縫生態系統的運作方式；其次，我將分享我們如何在新鮮事物方面領先並在數字方面加速的例子；最後，我將強調我們如何繼續實現我們的目標，通過員工經驗和我們的工作來推動 Kroger 的 ESG 承諾，以養活人類精神。

Our strategic focus on leading with fresh and accelerating with digital continues to build momentum across our businesses. As we've operated through the pandemic, we've recognized the structural shifts in our customers' eating and cooking habits. Customers are responding favorably to our value proposition and are enjoying the convenience of our seamless offerings.

我們的戰略重點是通過新鮮事物引領和加速數字化，這將繼續在我們的業務中建立勢頭。在我們度過大流行期間，我們已經認識到客戶飲食和烹飪習慣的結構性轉變。客戶對我們的價值主張做出了積極響應，並享受了我們無縫產品帶來的便利。

Early in the quarter, customers visited stores more frequently, and many shifted from online to in store. This highlights the relevance and convenience of our easily accessible footprint. Towards the end of the quarter, as COVID-19 cases increased in many geographies, customers began shifting back to our digital solutions. This further demonstrates the strength of our seamless ecosystem. Customers can choose how they want to shop. Our job is to be available in every channel, so the customer does not have to compromise. Regardless of how they choose to shop, customers are eating more food at home because it's more affordable, convenient and healthier than other options.

本季度初，客戶光顧商店的頻率更高，許多人從網上轉向實體店。這突出了我們易於訪問的足蹟的相關性和便利性。在本季度末，隨著許多地區 COVID-19 病例的增加，客戶開始轉向我們的數字解決方案。這進一步展示了我們無縫生態系統的實力。顧客可以選擇他們想要的購物方式。我們的工作是在每個渠道都可用，因此客戶不必妥協。無論他們選擇如何購物，顧客都在家裡吃更多的食物，因為它比其他選擇更實惠、更方便、更健康。

While some food and home trends may be transitory, our research suggests those I highlighted are structural, and Kroger is uniquely positioned to address them. Through our assortment of fresh products, world-class digital platform and innovative meal solutions, we will continue to elevate our position as a food authority so that when customers think food, they think Kroger.

雖然一些食品和家居趨勢可能是暫時的，但我們的研究表明，我強調的那些是結構性的，而克羅格在解決這些問題方面具有獨特的優勢。通過我們各種各樣的新鮮產品、世界一流的數字平台和創新的膳食解決方案，我們將繼續提升我們作為食品權威的地位，讓顧客想到食物時，就會想到克羅格。

We continue to advance our position as a leader in fresh during the second quarter. We saw positive identical sales in produce and floral and deli/bakery, even as we lapped elevated sales in 2020. Our research shows how much our customers love our brands. Sales for both Simple Truth and Private Selection brands were strong as food-at-home trends remained sticky.

我們在第二季度繼續提升我們作為新鮮食品領導者的地位。儘管我們在 2020 年實現了銷售額增長，但我們看到農產品、花卉和熟食/麵包店的銷售額相同。我們的研究表明，我們的客戶對我們品牌的喜愛程度。 Simple Truth 和 Private Selection 品牌的銷售強勁，因為家庭食品的趨勢仍然很粘。

We continue to innovate within fresh. For example, our expanded partnerships with ghost kitchens allow us to offer customers freshly prepared, on-demand restaurant food. This is especially relevant at a time when many customers are looking for inspiration, and 70% of our customers say convenience is important when cooking.

我們不斷創新內新鮮。例如，我們與幽靈廚房擴大的合作夥伴關係使我們能夠為客戶提供新鮮烹製的按需餐廳食品。這在許多客戶正在尋找靈感的時候尤其重要，我們 70% 的客戶表示烹飪時方便很重要。

We also announced our 2021 Go Fresh & Local Supplier Accelerator cohort and are already bringing innovative, locally and regionally sourced products to stores across the country and helping many small entrepreneurs achieve their dreams.

我們還宣布了我們的 2021 Go Fresh 和本地供應商加速器隊列，並且已經將創新的本地和區域採購產品帶到全國各地的商店，並幫助許多小企業家實現他們的夢想。

Earlier this week, Kroger announced our new brand icon. The fresh cart icon brings together the Kroger Family of Companies under one unifying visual and reinforces our brand promise: Fresh for Everyone.

本週早些時候，克羅格宣布了我們的新品牌標誌。新鮮的購物車圖標將克羅格公司家族聚集在一個統一的視覺效果下，並強化了我們的品牌承諾：為每個人提供新鮮。

We are very proud of our growth in digital, which increased 114% over the last 2 years, similar to our first quarter growth. We remain on track to deliver against our 2023 digital growth and profitability targets introduced at our 2021 IR Day. While digital sales decreased 13% during the quarter, almost all customers who reduced their online spend during the quarter continue to shop with us in store, highlighting the power of our ecosystem and our ability to create a meaningful customer experience across all channels.

我們為我們在數字領域的增長感到非常自豪，在過去兩年中增長了 114%，與我們第一季度的增長相似。我們仍有望實現我們在 2021 年投資者關係日提出的 2023 年數字增長和盈利目標。雖然本季度的數字銷售額下降了 13%，但幾乎所有在本季度減少在線支出的客戶都繼續在店內與我們一起購物，這凸顯了我們生態系統的力量以及我們在所有渠道創造有意義的客戶體驗的能力。

As a short reminder, Kroger has doubled our e-commerce household penetration, increasing the number of our brick-and-mortar customers that engage with our digital solutions since 2019. During the quarter, we added over 340,000 new customers to our digital platforms. We continue to expand capacity across our footprint, and we reduced wait times for Kroger pickup.

簡短提醒一下，克羅格的電子商務家庭滲透率翻了一番，自 2019 年以來使用我們的數字解決方案的實體客戶數量增加了。在本季度，我們的數字平台增加了超過 340,000 名新客戶。我們繼續擴大我們足蹟的容量，我們減少了 Kroger 取貨的等待時間。

As we look ahead, our seamless ecosystem will remain a competitive advantage as we offer what customers need and want in a way that fits into their life, whether it's shopping in our stores, picking it up at our stores, or getting it delivered or shipped directly to their homes.

展望未來，我們的無縫生態系統將保持競爭優勢，因為我們以適合客戶生活的方式提供客戶所需和想要的東西，無論是在我們的商店購物、在我們的商店取貨，還是送貨或發貨直接到他們家。

We continue to enhance our seamless ecosystem. As we've shared last quarter, we currently have 2 customer fulfillment centers open, which are expanding our capabilities in Ohio and allowing us to expand into the new geographies within Florida. We are happy with the performance thus far and are energized by the volume and growth in both sheds.

我們將繼續增強我們的無縫生態系統。正如我們上個季度所分享的，我們目前開設了 2 個客戶履行中心，這些中心正在擴大我們在俄亥俄州的能力，並使我們能夠擴展到佛羅里達州的新地區。我們對迄今為止的表現感到滿意，並對兩個棚子的數量和增長感到振奮。

In Ohio, our focus has been on evolving the customer proposition to maximize opportunities alongside our existing digital solutions. In Florida, we launched Delivery Savings Pass, offering customers unlimited deliveries for just $79 per year. We continue to see incredible Net Promoter Scores, and our customers tell us they love our friendly, professionally trained drivers and the refrigerated delivery vans that bring the freshest food directly to their doorsteps. Looking ahead, we remain on track to open 6 customer fulfillment centers over 2022 and 2023, which will further expand our seamless ecosystem.

在俄亥俄州，我們的重點一直是發展客戶主張，以最大限度地利用我們現有的數字解決方案的機會。在佛羅里達州，我們推出了 Delivery Savings Pass，為客戶提供無限制的送貨服務，每年只需 79 美元。我們繼續看到令人難以置信的淨推薦值，我們的客戶告訴我們，他們喜歡我們友好、受過專業培訓的司機和將最新鮮的食物直接送到他們家門口的冷藏送貨車。展望未來，我們仍有望在 2022 年和 2023 年開設 6 個客戶履行中心，這將進一步擴大我們的無縫生態系統。

Before I share some specifics on how we are using data and personalization to grow the business, I thought it would be helpful to remind you about our rewards program and how it works. Our rewards program has been active for over 2 decades. It captures data from 60 million households and 96% of our sales. Customers clearly see the value of our program, which drives sales and builds loyalty. As an example, nearly 60% of all items in a digital basket were added through our personalization science, highlighting our ability to make meaningful suggestions that surprise and delight customers. Furthermore, when we personalize recommendations for our customers, we can reduce their time to shop by nearly 70%.

在我分享一些關於我們如何使用數據和個性化來發展業務的細節之前，我認為提醒您我們的獎勵計劃及其運作方式會有所幫助。我們的獎勵計劃已經活躍了 2 多年。它從 6000 萬個家庭和 96% 的銷售額中獲取數據。客戶清楚地看到了我們計劃的價值，該計劃推動了銷售並建立了忠誠度。例如，數字購物籃中近 60% 的商品是通過我們的個性化科學添加的，這凸顯了我們提出有意義的建議的能力，讓客戶感到驚訝和愉悅。此外，當我們為客戶提供個性化推薦時，我們可以將他們的購物時間減少近 70%。

Overall, 1 in 3 people have noted that groceries have gotten more expensive in the past months. Kroger customers benefit from our personalization as we offer highly relevant savings at a household level, allowing them to further stretch their food dollars.

總體而言，三分之一的人注意到過去幾個月雜貨變得更加昂貴。克羅格客戶受益於我們的個性化，因為我們在家庭層面提供高度相關的儲蓄，使他們能夠進一步擴大他們的食品開支。

Our associates continue to deliver a full, fresh and friendly customer experience every day, every time while also supporting our communities through the pandemic. We remain urgently focused on keeping people safe in our stores and facilities. Our teams were recently recognized with the gold award for excellence in human capital management from the Brandon Hall Group for our people-centered COVID-19 response. Obviously, we're especially proud of that recognition.

我們的員工每天每次都繼續提供全面、新鮮和友好的客戶體驗，同時還支持我們的社區度過大流行。我們仍然緊急專注於確保人們在我們的商店和設施中的安全。我們的團隊最近因我們以人為本的 COVID-19 響應而獲得了 Brandon Hall Group 頒發的人力資本管理卓越金獎。顯然，我們為這種認可感到特別自豪。

During the quarter, we introduced new technology to elevate our associate experience. Kroger launched Fresh Start, a new, personalized training program to foster greater associate engagement and retention. We also launched our FEED app, which provides associates easy access to company communications and resources from their smartphones. We are incredibly proud that, during the quarter, we saw an improvement in retention as we strive to gain an employer where associates can come for a job and stay for a career.

在本季度，我們引入了新技術來提升我們的員工體驗。 Kroger 推出了全新的個性化培訓計劃“Fresh Start”，以提高員工的參與度和保留率。我們還推出了 FEED 應用程序，讓員工可以通過智能手機輕鬆訪問公司通訊和資源。我們感到無比自豪的是，在本季度，我們看到了留存率的提高，因為我們努力爭取找到一個雇主，讓員工可以來這裡找工作並留下來從事職業。

Now turning now to the live our purpose. We continue to believe that customers, associates and investors are increasingly choosing where to shop, where to work and where to invest in companies that are taking meaningful steps to improve our communities and work to build a more sustainable planet. We've recently published our 2021 ESG report on thekrogerco.com. It outlines our progress over the last several years. It further outlines our aspiration to further integrate ESG performance into lines of business and our commitment to creating shared value that benefits all stakeholders. We imagine a world where everyone is thriving together, and Kroger is helping millions of people live healthier, more sustainable lifestyles, protecting and restoring natural resources and contributing to more responsible and inclusive global systems.

現在轉向我們的目的。我們仍然相信，客戶、員工和投資者越來越多地選擇在哪裡購物、在哪里工作以及在哪裡投資那些正在採取有意義的措施來改善我們的社區並努力建設一個更可持續的地球的公司。我們最近在 thekrogerco.com 上發布了 2021 年 ESG 報告。它概述了我們在過去幾年中取得的進展。它進一步概述了我們將 ESG 績效進一步整合到業務線中的願望，以及我們對創造使所有利益相關者受益的共享價值的承諾。我們想像一個每個人都共同繁榮的世界，而克羅格正在幫助數百萬人過上更健康、更可持續的生活方式，保護和恢復自然資源，並為更負責任和更具包容性的全球系統做出貢獻。

One of the many ways we bring our ESG vision to life is through our work that our Kroger Health team has been doing to serve and support our customers and communities through the pandemic. During the quarter, we worked with Lyft to provide rides to COVID-19 vaccine appointments, teamed up with local sports icon to drive awareness and access in the underserved communities, and we concluded our #CommunityImmunity Giveaway. To date, we have provided over 6.7 million doses of the vaccine and continue to drive availability and education. And yesterday, President Biden noted that Kroger is 1 of 3 national partners who have agreed to make the rapid COVID test available to customers at cost for the next 100 days.

我們將 ESG 願景變為現實的眾多方式之一是通過我們的 Kroger Health 團隊一直在開展的工作，以在大流行期間為我們的客戶和社區提供服務和支持。在本季度，我們與 Lyft 合作，為 COVID-19 疫苗預約提供乘車服務，與當地體育偶像合作以提高服務不足社區的意識和訪問量，並結束了我們的#CommunityImmunity Giveaway。迄今為止，我們已提供超過 670 萬劑疫苗，並繼續推動可用性和教育。昨天，拜登總統指出，克羅格是同意在未來 100 天內以成本價向客戶提供快速 COVID 測試的 3 個國家合作夥伴之一。

Kroger is committed to helping people live healthier lives while safeguarding the communities we serve. Our ESG goals are ambitious. And with a team of almost 500,000 dedicated and driven associates, they are also achievable.

克羅格致力於幫助人們過上更健康的生活，同時保護我們所服務的社區。我們的 ESG 目標雄心勃勃。憑藉一支由近 500,000 名敬業且積極進取的員工組成的團隊，這些目標也是可以實現的。

Since we first introduced our commitment to delivering strong and sustainable total shareholder return in 2019, our teams have been laser-focused on execution. This focus has resulted in tangible results, allowing us to deliver this quarter and for the long term.

自從我們在 2019 年首次提出實現強勁且可持續的股東總回報的承諾以來，我們的團隊一直專注於執行。這種關注產生了切實的成果，使我們能夠在本季度和長期交付。

Now I would like to turn it over to Gary to discuss our second quarter financial results. Gary?

現在我想把它交給加里來討論我們第二季度的財務業績。加里？

Thanks, Rodney, and good morning, everyone. Kroger is delivering strong results and continues to build momentum as we execute on our priorities of leading with fresh and accelerating with digital.

謝謝，羅德尼，大家早上好。克羅格正在取得強勁的業績，並繼續建立勢頭，因為我們執行我們的優先事項，即以新鮮事物領先並以數字方式加速。

During the quarter, adjusted FIFO operating profit grew by a compounded annual growth rate of 23% over 2019, and adjusted EPS grew by a compounded annual growth rate of 35% over the same 2-year period. This reflects our disciplined approach to executing our strategy, balancing investments in our associates and customers with strong cost management and accelerating growth in our alternative profit business. It also provides a further proof point of how we are successfully navigating the pandemic and emerging stronger as a business.

本季度，調整後的 FIFO 營業利潤比 2019 年的複合年增長率增長了 23%，調整後的每股收益在同一 2 年期間的複合年增長率為 35%。這反映了我們執行戰略的嚴謹方法，平衡對員工和客戶的投資與強大的成本管理以及加速我們的替代利潤業務的增長。它還進一步證明了我們是如何成功度過這一流行病並作為一家企業變得更強大的。

I will now provide additional details on our second quarter results. Identical sales without fuel declined 0.6%. On a 2-year stack basis, identical sales without fuel increased 14%. Each period during the quarter was stronger than the last, and I'm delighted to say we returned to positive identical sales without fuel during the final period of the quarter.

我現在將提供有關我們第二季度業績的更多詳細信息。不含燃料的相同銷售額下降了 0.6%。在 2 年堆棧的基礎上，不含燃料的相同銷售額增長了 14%。本季度的每個時期都比上一個時期強勁，我很高興地說，我們在本季度的最後一個時期在沒有燃料的情況下恢復了積極的相同銷售額。

Our digital platform remains a key strength in our model, and we were pleased with the triple-digit growth achieved over 2019. We remain on track with our plans to double our digital business by 2023 and would expect continued investments in the customer experience, scaling of new fulfillment centers and several new innovations which we will announce throughout the year to drive future growth. As shared last quarter, we would not expect future digital growth to be linear, especially as we cycle COVID in 2021.

我們的數字平台仍然是我們模式的關鍵優勢，我們對 2019 年實現的三位數增長感到滿意。我們仍按計劃在 2023 年將數字業務翻一番，並期望繼續投資於客戶體驗、擴展我們將在全年宣布新的履行中心和幾項新的創新，以推動未來的增長。正如上個季度所分享的，我們預計未來的數字增長不會是線性的，尤其是當我們在 2021 年循環 COVID 時。

During the quarter, we also made further progress in improving digital profitability as we achieved a record low for the time taken to pick a digital order in store and continue to see growth in the media revenue generated on digital transactions.

在本季度，我們在提高數字盈利能力方面也取得了進一步進展，因為我們在店內挑選數字訂單所需的時間創下歷史新低，並繼續看到數字交易產生的媒體收入增長。

Gross margin was 21.4% of sales for the second quarter. The FIFO gross margin rate, excluding fuel, decreased 60 basis points compared to the same period last year. This decrease was primarily related to price investments and higher shrink and supply chain costs, partially offset by sourcing benefits and growth in our alternative profit business. On a 2-year basis, our FIFO gross margin rate, excluding fuel, decreased 55 basis points compared to 2019.

第二季度的毛利率為銷售額的 21.4%。不包括燃料的 FIFO 毛利率與去年同期相比下降了 60 個基點。這一下降主要與價格投資以及更高的收縮和供應鏈成本有關，部分被採購收益和我們替代利潤業務的增長所抵消。在 2 年的基礎上，我們的 FIFO 毛利率（不包括燃料）與 2019 年相比下降了 55 個基點。

Consistent with many retailers, we experienced supply chain constraints and increased warehouse and transportation costs during the quarter. We are actively managing this risk within our business by securing increased capacity and augmenting associate retention programs within our own facilities. We expect supply chain costs to remain elevated in the second half of the year, and this is contemplated in our updated guidance.

與許多零售商一樣，我們在本季度經歷了供應鏈限制以及倉庫和運輸成本增加。我們通過在我們自己的設施內確保增加容量和加強員工保留計劃來積極管理我們業務中的這種風險。我們預計今年下半年供應鏈成本將保持高位，這在我們更新的指導中有所考慮。

In the second half of the quarter, we also saw higher inflation in some categories. We are being disciplined in working with suppliers to manage these increases and are passing along higher cost to the customer where it makes sense to do so. While difficult to predict with precision, as we shared last quarter, we believe inflation for the full year will be higher than originally contemplated in our 2021 business plan. For the second half of 2021, our guidance now assumes inflation of between 2% and 3%. Recognizing recent inflation trends and our outlook for the rest of the year, we recorded a higher LIFO charge for the quarter of $47 million compared to $23 million in the prior year.

在本季度下半年，我們還看到某些類別的通脹率較高。我們在與供應商合作以管理這些增長方面受到紀律處分，並將更高的成本轉嫁給有意義的客戶。雖然難以準確預測，但正如我們上個季度所分享的那樣，我們認為全年的通脹將高於我們 2021 年業務計劃中最初的預期。對於 2021 年下半年，我們的指引現在假設通脹率在 2% 至 3% 之間。認識到最近的通貨膨脹趨勢和我們對今年剩餘時間的展望，我們在本季度記錄了 4700 萬美元的 LIFO 費用，而去年為 2300 萬美元。

Further strong operational execution allowed us to leverage operating, general and administrative expenses by 76 basis points, excluding fuel and adjustment items, in the second quarter. This reflects lower COVID-19-related costs and savings captured through our cost-saving initiatives.

進一步強勁的運營執行使我們能夠在第二季度將運營、一般和行政費用提高 76 個基點，不包括燃料和調整項目。這反映了較低的 COVID-19 相關成本和通過我們的成本節約計劃獲得的節約。

On a 2-year basis, our OG&A rate, excluding fuel and adjustment items, decreased by 137 basis points compared to 2019. We continue to see opportunities to streamline processes and leverage technology and remain on track to deliver $1 billion in cost savings during 2021.

在 2 年的基礎上，我們的 OG&A 費率（不包括燃料和調整項目）與 2019 年相比下降了 137 個基點。我們繼續看到簡化流程和利用技術的機會，並有望在 2021 年實現 10 億美元的成本節約.

The traffic and data generated by our seamless ecosystem continues to create a strong flywheel effect for our alternative profit business, which again experienced significant profit growth in the quarter. Media and Kroger Personal Finance continued to lead the way, and we remain on track to achieve the high end of our expected range of $100 million to $150 million of incremental operating profit in 2021.

我們無縫生態系統產生的流量和數據繼續為我們的替代利潤業務創造強大的飛輪效應，該業務在本季度再次經歷了顯著的利潤增長。媒體和 Kroger Personal Finance 繼續引領潮流，我們仍有望在 2021 年實現 1 億美元至 1.5 億美元增量營業利潤的預期範圍的高端。

Fuel is also an important part of our overall value proposition for our customers. Gallons grew in the second quarter by 7% and outpaced market growth. The average retail price of fuel was $3.13 this quarter versus $2.14 in the same quarter last year. Our cents per gallon fuel margin was $0.39 compared to $0.37 in the same quarter in 2020, and fuel was a tailwind to operating profit of $33 million compared to prior year.

燃料也是我們為客戶提供的整體價值主張的重要組成部分。加侖在第二季度增長了 7%，超過了市場增長。本季度燃料的平均零售價為 3.13 美元，而去年同期為 2.14 美元。我們每加侖燃料的利潤率為 0.39 美元，而 2020 年同期為 0.37 美元，與去年同期相比，燃料對 3300 萬美元的營業利潤有利。

Turning now to our financial strategy. We continue to generate strong free cash flow and remain committed to investing in the business to drive sustainable growth while also returning excess cash to shareholders. We are prioritizing capital investments that support our growth strategy, widen our competitive moats, and deliver strong returns.

現在轉向我們的財務戰略。我們繼續產生強勁的自由現金流，並繼續致力於投資業務以推動可持續增長，同時還將多餘的現金返還給股東。我們優先考慮支持我們的增長戰略、拓寬競爭護城河並帶來豐厚回報的資本投資。

Capital expenditures year-to-date were down compared to prior year as we carefully navigated the impact of higher project costs and longer project lead times due to a challenging labor market. As we confirmed in guidance today, we are maintaining our range for capital investments, excluding mergers, acquisitions and purchases of leased facilities, of between $3.4 billion and $3.6 billion and would currently anticipate coming in at the low end of this range for the year.

由於勞動力市場充滿挑戰，我們仔細應對了較高的項目成本和較長的項目交付週期的影響，與去年相比，今年迄今為止的資本支出有所下降。正如我們今天在指導中確認的那樣，我們將資本投資範圍（不包括合併、收購和購買租賃設施）維持在 34 億美元至 36 億美元之間，目前預計今年將處於該範圍的低端。

During the quarter, Kroger repurchased $349 million of shares and year-to-date has repurchased $751 million of shares. As of the end of the second quarter, $779 million remains outstanding under the current Board authorization announced on June 17, 2021. In June, Kroger also increased the dividend by 17%, marking the 15th consecutive year of dividend increases.

本季度，克羅格回購了 3.49 億美元的股票，今年迄今已回購了 7.51 億美元的股票。截至第二季度末，根據 2021 年 6 月 17 日宣布的當前董事會授權，仍有 7.79 億美元未償付。6 月，克羅格還將股息提高了 17%，這是連續第 15 年提高股息。

Our proactive approach to investing in our associates over recent years is helping us navigate a challenging labor market. Our strategy continues to focus on investing in compensation plans that reward our associates in ways that are meaningful to them. We are committing to investing $350 million in hourly wage increases for our associates during 2021, in addition to the $800 million we invested in associate wages between 2018 and 2020.

近年來，我們積極投資於員工的方法正在幫助我們應對充滿挑戰的勞動力市場。我們的戰略繼續專注於投資於以對員工有意義的方式獎勵員工的薪酬計劃。除了我們在 2018 年至 2020 年期間為員工工資投資的 8 億美元之外，我們還承諾在 2021 年投資 3.5 億美元用於增加員工的時薪。

Over the same period, we have also taken several opportunities to improve the security of our associates' pension benefits. Our average hourly rate is now in excess of $16 an hour. And with comprehensive benefits factored in, we'll be approaching $21 by the end of 2021. We are committed to increasing retail hourly wages sustainably, and our long-term financial model fully contemplates continued investments in associate hourly rates.

在同一時期，我們還利用了幾次機會來提高員工養老金福利的安全性。我們的平均時薪現在超過每小時 16 美元。考慮到綜合福利，到 2021 年底，我們將接近 21 美元。我們致力於可持續地提高零售時薪，我們的長期財務模型充分考慮了對員工時薪的持續投資。

During the second quarter, we ratified new labor agreements with the UFCW for associates in our Atlanta, Michigan, Food 4 Less and Mid-Atlantic divisions, covering over 34,000 associates. We continue to negotiate contracts with the UFCW for store associates in Houston, Little Rock, Memphis and Portland. Our financial results continue to be pressured by inefficiencies in health care and pension costs, which most of our competitors do not face. We continue to communicate with our local and international unions, which represent many of our associates about the importance of growing our business in a profitable way, which will help us create more jobs and career opportunities and enhance job security for our associates.

在第二季度，我們與 UFCW 批准了亞特蘭大、密歇根、Food 4 Less 和大西洋中部部門員工的新勞動協議，覆蓋超過 34,000 名員工。我們將繼續與 UFCW 就休斯頓、小石城、孟菲斯和波特蘭的商店員工的合同進行談判。我們的財務業績繼續受到醫療保健和養老金成本效率低下的壓力，而我們的大多數競爭對手都沒有遇到這種情況。我們將繼續與代表我們許多員工的本地和國際工會就以盈利方式發展業務的重要性進行溝通，這將有助於我們創造更多的就業機會和職業機會，並增強我們員工的工作保障。

Turning now to our expectations for the second half of 2021. Driven by momentum in our results and sustained trends in food at home, we are raising our full year guidance. We have also narrowed the range of our guidance as we are further into the year and the trends in our business and the broader food-at-home market become clearer. We now expect identical sales without fuel in the second half of 2021 to be flat to slightly positive, resulting in full year results of negative 1.5% to negative 1% and a 2-year identical sales stack of between 12.6% to 13.1%. We expect our adjusted net earnings per diluted share to be in the range of $3.25 to $3.35. We expect our adjusted FIFO operating profit to be in the range of $3.9 billion to $4 billion, reflecting a 2-year compounded annual growth rate of between 14.1% and 15.6%.

現在轉向我們對 2021 年下半年的預期。在我們業績增長勢頭和國內食品持續趨勢的推動下，我們正在提高全年指導。隨著今年的進一步深入，我們的業務趨勢和更廣泛的家庭食品市場變得更加清晰，我們還縮小了指導範圍。我們現在預計 2021 年下半年不含燃料的相同銷售額將持平或略為正數，導致全年業績為負 1.5% 至負 1%，兩年相同銷售量在 12.6% 至 13.1% 之間。我們預計調整後的每股攤薄淨收益將在 3.25 美元至 3.35 美元之間。我們預計我們調整後的 FIFO 營業利潤將在 39 億美元至 40 億美元之間，反映出 14.1% 至 15.6% 的 2 年復合年增長率。

In conclusion, we are emerging stronger through the pandemic and remain confident in our ability to deliver total shareholder return of 8% to 11% by sustainably growing earnings and using our resilient free cash flow to return excess cash to investors.

總而言之，我們正在通過大流行變得更加強大，並且對我們通過可持續增長的收益和利用我們有彈性的自由現金流向投資者返還多餘現金來實現 8% 至 11% 的總股東回報的能力充滿信心。

And now I'll turn it back to Rodney.

現在我將把它轉回給羅德尼。

Thank you, Gary. The environment we operate in is dynamic, and I am so proud of our associates' ability to meet the challenge and serve our customers while building for the future.

謝謝你，加里。我們所處的環境充滿活力，我為我們的員工在迎接挑戰和服務客戶的同時為未來建設的能力感到非常自豪。

Kroger's seamless ecosystem is working. This was evident during the quarter as we saw customers seamlessly shift between channels, and we continue to see strong digital engagement. We are leveraging technology, innovation and our competitive moats to deliver against the total shareholder return model we introduced in 2019 and reaffirmed in 2021. Kroger will continue to deliver for all stakeholders and position the business for long-term success.

克羅格的無縫生態系統正在發揮作用。這在本季度很明顯，因為我們看到客戶在渠道之間無縫轉換，我們繼續看到強大的數字參與度。我們正在利用技術、創新和我們的競爭護城河來實現我們在 2019 年引入並在 2021 年重申的股東總回報模型。克羅格將繼續為所有利益相關者提供服務，並將業務定位為長期成功。

Now we look forward to your questions.

現在我們期待您的提問。

(Operator Instructions) Our first question comes from Greg Badishkanian with Wolfe Research.

（操作員說明）我們的第一個問題來自 Wolfe Research 的 Greg Badishkanian。

This is Spencer Hanus on for Greg. Can you guys talk about the comps that you're seeing quarter-to-date? Because I think the guidance does imply somewhat of a slowdown on a 2-year basis in the second half. And then, although it's early, how are you thinking about comps in 2022. Do you guys get back to your long-term algo next year?

這是格雷格的斯賓塞漢努斯。你們能談談你們看到的季度至今的比賽嗎？因為我認為該指導確實意味著下半年會在兩年的基礎上有所放緩。然後，雖然現在還早，但你們如何看待 2022 年的比賽。你們明年會回到你們的長期算法嗎？

Yes, yes. As Gary mentioned in his prepared remarks, the last period of the second quarter, we returned to positive identicals. And so far, in the third quarter, we continue to see the trend of positive identicals, and our guidance for the balance of the year is positive as well. So we're very pleased with where we are. We're pleased with the performance our teams are doing, and we're making progress and substantially ahead of where we initially we thought we would be at this point in time on cycling the COVID peak from last year.

是的是的。正如加里在他準備好的講話中提到的那樣，第二季度的最後一個時期，我們回到了積極的相同點。到目前為止，在第三季度，我們繼續看到積極的相同趨勢，我們對今年餘額的指導也是積極的。所以我們對我們所處的位置非常滿意。我們對我們團隊的表現感到滿意，並且我們正在取得進展，並且大大領先於我們最初認為我們會在這個時間點從去年開始循環 COVID 高峰的地方。

As we look toward 2022, Gary, unless you want to get into more of the details, I think the key thing would be what we talked about at our Investor Day in 2021, and that's our commitment to a TSR model of 8% to 11%. And that's driven by a combination of sales growth, slight margin improvements and taking free cash flow and returning it to our shareholders via dividend and stock buyback. And the sum of those together is what will drive the 8% to 11%, and we remain committed to that. And obviously, since we put it in place in 2019, we've outperformed it.

展望 2022 年，Gary，除非你想了解更多細節，否則我認為關鍵是我們在 2021 年投資者日所討論的內容，這就是我們對 8% 到 11 的 TSR 模型的承諾%。這是由銷售增長、利潤率略有提高以及獲得自由現金流並通過股息和股票回購將其返還給我們的股東共同推動的。這些總和將推動 8% 到 11%，我們將繼續致力於此。顯然，自從我們在 2019 年實施以來，我們的表現已經超越了它。

I don't know, Gary, if you want to add anything.

我不知道，加里，如果你想添加任何東西。

The only thing I would add, I think you said it very well, Rodney, is we feel really good about the trends in the business, obviously, as we shared on the prepared comments. As you look at the back half of the year, you asked some -- for additional color on how we're thinking about the trends that we're seeing there and the guidance, I would say we're obviously heading into the back half of the year, as Rodney mentioned, with momentum in the business.

我唯一要補充的是，羅德尼，我認為你說得很好，很明顯，正如我們在準備好的評論中分享的那樣，我們對業務趨勢感覺非常好。當您查看今年下半年時，您問了一些問題-關於我們如何考慮我們在那裡看到的趨勢和指導的更多顏色，我想說我們顯然正在進入下半年正如羅德尼所說，今年的業務勢頭強勁。

We did raise the guidance to now be in that sort of 0% to 1% for the back half of the year based on reversing into that from the year-to-date performance and the guidance that we gave for the year. Overall, we're feeling really good about how we're executing in the business and seeing that sustained trend in food at home as consumers continue to gravitate towards some of the trends that Rodney talked about. And also, obviously, we are seeing some return to previous behavior with the Delta variant currently prevalent in the U.S. as well.

根據從年初至今的表現和我們今年給出的指導，我們確實將今年下半年的指導提高到了 0% 到 1%。總體而言，我們對我們在業務中的執行方式感覺非常好，並且隨著消費者繼續傾向於羅德尼談到的一些趨勢，我們看到了家庭食品的持續趨勢。而且，很明顯，我們看到目前在美國流行的 Delta 變體也恢復了以前的行為。

That being said, we do still think there are some knowns in the market. If you look at different countries, how long the impact of the Delta variant lasts, if you like, on consumer behavior, we are seeing some consumers return to normal behavior, returning to offices in some cases. And so while we feel really good about our trends and our ability to continue to win with the customer, the back half of the year would be more of an 11% to 12% 2-year stack based on still some of the uncertainties and unknowns around those elements that we're still looking to see how they play out.

話雖如此，我們仍然認為市場上有一些已知的東西。如果你看看不同的國家，Delta 變體的影響持續多久，如果你願意的話，對消費者行為的影響，我們看到一些消費者恢復正常行為，在某些情況下返回辦公室。因此，儘管我們對自己的趨勢和繼續贏得客戶的能力感到非常滿意，但基於仍有一些不確定性和未知因素，今年下半年的 2 年籌碼量將更多地達到 11% 到 12%圍繞我們仍在尋找的那些元素，看看它們是如何發揮作用的。

I think the only other thing that I would reinforce on Rodney's comment is that we do expect, as we shared at our Investor Day at the beginning of the year, that as we come through 2020 and 2021, we expect the overall food-at-home trends in the market but also specifically Kroger's overall sales to come out of 2021 in a much stronger position than we would have been had the pandemic not occurred. And so we believe that, that will still certainly be true as we head towards '22. And obviously, we look forward to sharing more details on 2022 when we get towards the end of the year.

我認為我對羅德尼的評論唯一要強調的另一件事是，正如我們在年初的投資者日上分享的那樣，我們確實預計，隨著我們進入 2020 年和 2021 年，我們預計整體食品-市場趨勢，尤其是克羅格在 2021 年的整體銷售情況，比沒有發生大流行的情況要強得多。因此，我們相信，隨著我們邁向 22 年，這仍然是正確的。顯然，我們期待在接近年底時分享 2022 年的更多細節。

That's really helpful color. And then could you guys comment on how rational your peers have been at passing through inflation? And are you expecting any gross margin headwinds from some of the elevated inflation in the perimeter of the store? Any additional color there would be helpful.

這顏色真的很有幫助。然後你們能評論一下你們的同行在通過通貨膨脹方面有多理性嗎？您是否預計商店周邊的一些高通脹會對毛利率產生不利影響？那裡的任何其他顏色都會有所幫助。

If you look at -- during the quarter, about half of the gross margin impact was from higher shrink and higher supply chain costs, and Gary, in his prepared remarks, talked a little bit about both of those. But if you look at shrink, a lot of that -- about half of the half or 25% of it is driven within the shrink component, and that's heavily driven by organized crime or at least it appears to be. And I know Congress and other groups are starting to spend more time on understanding what's driving that and what's behind it and what's the distribution channels for the stolen products as well and trying to manage that.

如果你看一下 - 在本季度，大約一半的毛利率影響來自更高的收縮和更高的供應鏈成本，加里在他準備好的評論中談到了這兩者。但如果你看一下收縮，其中很多——大約一半或 25% 是在收縮部分中驅動的，這在很大程度上是由有組織犯罪驅動的，或者至少看起來是這樣。我知道國會和其他團體開始花費更多時間來了解是什麼推動了這一點，背後是什麼，以及被盜產品的分銷渠道是什麼，並試圖對其進行管理。

And then on the supply chain costs, we are proactively investing there to minimize the effect. On both of those areas, the guidance that Gary shared for the balance of the year reflects the pressure in those areas. And from an inflationary standpoint, as you know, over time, we've been successful in operating in slow or negative inflation and high inflation, and we would see this no different. And our business, the easiest place to operate is when inflation is between 3% or 4%, but you don't ever get what you -- it makes it the easiest. But so far, we're -- costs are being passed through in an organized way for the most part and as we would expect and following our strategy.

然後在供應鏈成本方面，我們正在積極投資以盡量減少影響。在這兩個領域，加里分享的年度餘額指導反映了這些領域的壓力。從通貨膨脹的角度來看，正如你所知，隨著時間的推移，我們已經成功地在緩慢或負通貨膨脹和高通貨膨脹的情況下運作，我們認為這沒有什麼不同。而我們的業務，最容易操作的地方是通貨膨脹率在 3% 或 4% 之間，但你永遠得不到你想要的——這使它變得最容易。但到目前為止，我們正在以有組織的方式轉移成本，正如我們所期望的那樣，並遵循我們的戰略。

Our next question comes from Michael Lasser with UBS.

我們的下一個問題來自瑞銀的 Michael Lasser。

I wanted to drill down into your comments around the consumer embracing eating at home, coupled with targeting the total shareholder return formula for next year. We're still largely in the midst of this pandemic. Many workers are still working from home. So is the strength this year just delaying the inevitable shift back to food away from home in calendar '22? And if that's the case, you're guiding to a 3% operating margin this year essentially. So how will you be able to maintain this operating margin rate in an environment where your sales are going to continue to be pressured, particularly as you have reduced a lot of your OG&A expenses this year?

我想深入了解您對消費者在家就餐的看法，以及明年的股東總回報公式。我們在很大程度上仍處於這場大流行之中。許多工人仍在家里工作。那麼，今年的強勢是否只是推遲了 22 年不可避免地回到家外吃飯的轉變？如果是這樣的話，你今年的營業利潤率基本上是 3%。那麼，在您的銷售將繼續受到壓力的環境中，尤其是在您今年減少了大量 OG&A 費用的情況下，您將如何保持這種營業利潤率？

Thanks, Michael. I'll start and let Gary finish. If you look at all of our research on people eating at home, customers are telling us, they enjoy eating at home and eating with their families, which we believe is structural and sustainable. They're also telling us that eating at home, they're able to eat healthier, stretch their budget significantly further because it's not nearly as expensive as eating in a restaurant. And they also like showing off their new skills on cooking. And all of those things -- everything that our research would suggest are long-term trends and structural trends.

謝謝，邁克爾。我會開始，讓加里完成。如果您查看我們對在家吃飯的人所做的所有研究，客戶會告訴我們，他們喜歡在家吃飯並與家人一起吃飯，我們認為這是結構性和可持續的。他們還告訴我們，在家裡吃飯，他們能夠吃得更健康，進一步擴大他們的預算，因為這並不像在餐館吃飯那麼貴。他們還喜歡炫耀自己的烹飪新技能。所有這些——我們的研究表明的一切都是長期趨勢和結構性趨勢。

The other thing that everybody on the call, your guess is as good as ours. But everything that we can tell, we believe that people will continue working from home more than the past. And many companies, and I know certainly we are, are supporting people in terms of different jobs, what jobs can be worked from what location. And in all of those cases, what we're finding is people are eating more meals at home, i.e., breakfast and lunch. So everything that we can see, a meaningful part of the trend change is really structural and sustainable, and it's not just a onetime blip because of COVID.

通話中的每個人的另一件事，您的猜測與我們的猜測一樣好。但據我們所知，我們相信人們將比過去更多地繼續在家工作。許多公司，我當然知道我們是，在不同的工作方面為人們提供支持，哪些工作可以在什麼地點工作。在所有這些情況下，我們發現人們正在家裡吃更多的飯菜，即早餐和午餐。因此，我們所看到的一切，趨勢變化的一個有意義的部分確實是結構性的和可持續的，這不僅僅是因為 COVID 而出現的一次性現象。

In terms of the margins and stuff, Gary, I'll let you drill into some of that detail.

就邊距和內容而言，Gary，我會讓你深入了解其中的一些細節。

Yes. I think all I would add, Rodney, is maybe just -- Mike, we'll take you back to the journey we've been on for the last 3 years with our model. And if you think about how we teed it up at our Investor Days, we feel that over 2019, 2020 and now 2021, we're really demonstrating how we're able to manage the business more holistically as we think about delivering on our TSR model.

是的。我想我要補充的，羅德尼，也許只是——邁克，我們將帶你回到過去 3 年我們的模型所經歷的旅程。如果您考慮一下我們在投資者日是如何進行的，我們認為在 2019 年、2020 年和現在的 2021 年，我們確實在展示我們如何能夠更全面地管理業務，因為我們考慮實現我們的 TSR模型。

So you think about the continued investments, even through the pandemic, that we are making in our customers to ensure that they see the value we're delivering, whether that's in the experience and some of the digital investments or through continuing to invest in price where it make sense and personalization to make sure positioned well with the customer, the investments that we're making in average hourly for our associates to ensure that we're continuing to improve the experience there.

因此，即使在大流行期間，您也要考慮我們對客戶進行的持續投資，以確保他們看到我們提供的價值，無論是在體驗和一些數字投資中，還是通過繼續投資於價格在有意義和個性化的情況下，確保與客戶保持良好的定位，我們平均每小時為員工進行的投資，以確保我們繼續改善那裡的體驗。

And as you look at that and then think about the way in which we've managed costs, we're continuing to accelerate our alternative profit businesses, and at the same time, continue to get stronger and more effective at sourcing and managing margins in that way. I think that gives us confidence in our ability to continue to manage the business overall and drive a strong TSR in line with our commitments as you think about over time what our commitments are to our shareholders.

當您看到這一點並思考我們管理成本的方式時，我們將繼續加速我們的替代利潤業務，同時在採購和管理利潤方面繼續變得更強大和更有效那樣。我認為這讓我們對我們有能力繼續管理整體業務並根據我們的承諾推動強大的 TSR，因為隨著時間的推移，您會考慮我們對股東的承諾。

So we'll obviously get into more specifics around how we think about '22 later in the year. And at this point, I wouldn't want to get into specific details about next year, but that's certainly how we think about our model and how we get confident in our ability to maintain the trajectory over time and supported by Rodney's comment on how we think about continuing to see the customer spend dollars on food at home and how we can continue to grow our business within that context.

因此，我們顯然會在今年晚些時候更詳細地討論我們對 22 年的看法。在這一點上，我不想透露明年的具體細節，但這當然是我們對模型的看法，以及我們如何對隨著時間的推移保持軌蹟的能力充滿信心，並得到羅德尼關於我們如何考慮繼續看到客戶在家里花錢買食物，以及我們如何在這種情況下繼續發展我們的業務。

Yes. As you look at cost, it's one of those things where we've been able to take cost out of the business without affecting the customer experience for years. And I know when we set out a goal, we always think that that's all we're going to find, and then our great teams are able to find more areas for process change and cost opportunities.

是的。當您查看成本時，這是我們多年來能夠在不影響客戶體驗的情況下從業務中降低成本的事情之一。而且我知道，當我們設定目標時，我們總是認為這就是我們要找到的全部，然後我們優秀的團隊能夠找到更多的流程變更領域和成本機會。

And when I watch our operations team, Gary mentioned the procurement team, our technology team, but more importantly, how our stores and technology and operations team are working as one, they continue to identify things to make our associates' job easier to reduce the number of touches of product and be able to take costs out, which our customers then benefit. And some of that cost reduction is shared with our customers. Some of it is shared with our associates, but it's part of the overall flywheel that continues to accelerate and make our model sustainable. And Gary's point on alternative profit is an important component of that as well.

當我觀察我們的運營團隊時，Gary 提到了採購團隊，我們的技術團隊，但更重要的是，我們的商店以及技術和運營團隊如何協同工作，他們不斷發現事情以使我們的員工的工作更容易減少產品的接觸次數，並能夠降低成本，然後我們的客戶從中受益。部分成本降低與我們的客戶共享。其中一些與我們的同事共享，但它是整個飛輪的一部分，繼續加速並使我們的模型可持續發展。加里關於替代利潤的觀點也是其中的一個重要組成部分。

Actually, Rodney, one other thing on the cost side, Michael, that I think is important, too. We've mentioned this again at our Investor Day, but this -- the plan that we have to double digital profitability, that's obviously very important to the long-term strategy that Rodney outlined around how do we make sure that, from a customer perspective, they're not having to compromise between store and digital experiences but is also important from a business model point of view to continue to improve the profitability of the channel. So that from our perspective, we can be agnostic from whether the customer is buying online or buying in the store.

實際上，羅德尼，另一件事是成本方面的，邁克爾，我認為這也很重要。我們在投資者日再次提到了這一點，但這 - 我們必須將數字盈利能力翻倍的計劃，這顯然對羅德尼概述的長期戰略非常重要，從客戶的角度來看，我們如何確保這一點，他們不必在商店和數字體驗之間妥協，但從商業模式的角度來看，繼續提高渠道的盈利能力也很重要。因此，從我們的角度來看，我們可以不知道客戶是在網上購買還是在商店購買。

As we grow that digital profitability rate, important to remember that just doesn't affect the growth in the future, it affects the $10 billion business that we have today. So that's also proving to be a tailwind in the financial modeling OG&A now but also will continue to be a tailwind because we're only partway through that journey as we take cost out of filling an order and continue to grow media revenue per transaction as well.

隨著我們提高數字化盈利率，重要的是要記住，這不會影響未來的增長，它會影響我們今天擁有的 100 億美元的業務。因此，這也被證明是現在 OG&A 財務建模的順風，但也將繼續成為順風，因為我們只是完成了這一旅程的一部分，因為我們消除了履行訂單的成本並繼續增加每筆交易的媒體收入。 .

And my follow-up is focusing on the media revenue per transaction, it seems like that's the area where you're really supporting the profitability of your digital business, and subsequently, the overall gross margin for Kroger as a result. Where are you from an advertising perspective from a large CPG company perspective versus getting more advertisers on the platform? Can you frame out how big this advertising opportunity can be?

我的後續關注重點是每筆交易的媒體收入，這似乎是你真正支持數字業務盈利能力的領域，因此也是克羅格的整體毛利率。從大型 CPG 公司的角度來看，與在平台上吸引更多廣告商相比，您在哪裡？你能說出這個廣告機會有多大嗎？

And as an unrelated side note, to what extent was there a vaccine distribution benefit within the gross margin? One of your large competitors talked about that within the quarter.

作為一個不相關的旁注，毛利率內的疫苗分銷收益在多大程度上？您的一個大型競爭對手在本季度談到了這一點。

Well, several questions there. I'll briefly talk about the media. We still see retail media as a significant opportunity. And we shared at Investor Day, but Kroger's retail media team and our retail media offer in 5 different areas, we ranked #1 among our competitors in 3 of the 5, and we were tied for #1 on the other 2. So obviously, the value CPGs get from our offer and our ability to use our data to make sure the right customers are seeing offers is substantial and significant, and we believe that it's a significant opportunity to continue to grow retail media. I won't get into specifics, other than we would say that we feel like we're just getting started.

嗯，有幾個問題。我將簡單地談談媒體。我們仍然認為零售媒體是一個重要的機會。我們在投資者日分享了，但是克羅格的零售媒體團隊和我們的零售媒體在 5 個不同的領域提供服務，我們在 5 個中的 3 個中在競爭對手中排名第一，在另外 2 個中我們並列第一。所以很明顯， CPG 從我們的報價中獲得的價值以及我們使用我們的數據來確保正確的客戶看到報價的能力是巨大而重要的，我們相信這是繼續發展零售媒體的重要機會。我不會詳細說明，只是我們會說我們覺得我們才剛剛開始。

Yes. And then, Michael, I would just say on the health and wellness question, we would certainly have seen some benefit from COVID vaccines during the quarter. Having said that, we pivoted a lot of our efforts in the pharmacy business, which, as you know, is a big part of our operation and our little clinics. So I would say, net-net, if you look at the health and wellness business, I would think of it as largely being on plan. And so I wouldn't think of it as a headwind or a tailwind during the quarter or, for that matter, being a headwind for the rest of the year either. I think we've got fully contemplated within our guidance the expectations around the health and wellness business going forward.

是的。然後，邁克爾，我只想在健康和保健問題上說，我們肯定會在本季度看到 COVID 疫苗的一些好處。話雖如此，我們在藥房業務上投入了大量精力，如您所知，這是我們運營和小型診所的重要組成部分。所以我想說，net-net，如果你看看健康和保健業務，我會認為它在很大程度上是在計劃中。因此，我不會將其視為本季度的逆風或順風，或者就此而言，也不會成為今年剩餘時間的逆風。我認為我們已經在我們的指導中充分考慮了對未來健康和保健業務的期望。

Your next question comes from Chuck Cerankosky with Northcoast Research.

您的下一個問題來自 Northcoast Research 的 Chuck Cerankosky。

Nice quarter. I want to talk a little bit about or ask a little bit about private label in this inflationary period. How do you see customers reacting to it? And is there a difference between a customer shopping in store and online?

漂亮的季度。在這個通貨膨脹時期，我想談談或詢問一下自有品牌。您如何看待客戶對此的反應？顧客在實體店購物和在網上購物有區別嗎？

Yes. If you look at our brands, Simple Truth and Private Selection continues to really gain share and grow. We're also finding big packs are growing significantly. If you look at -- for us, we find our brands -- if CPGs are passing through inflation that's not real, all -- every time when somebody does that, our brands even gain incremental share.

是的。如果您查看我們的品牌，Simple Truth 和 Private Selection 將繼續真正獲得份額和增長。我們還發現大包裝正在顯著增長。如果你看一下——對我們來說，我們會發現我們的品牌——如果 CPG 正在經歷不真實的通貨膨脹——每次有人這樣做時，我們的品牌甚至會獲得增量份額。

The other thing that I've been really proud of our team is the innovation behind the product, and we've introduced over 140 new products in the quarter and would continue to expect that going forward.

我為我們的團隊真正感到自豪的另一件事是產品背後的創新，我們在本季度推出了 140 多種新產品，並將繼續期待未來的發展。

I don't -- we're not seeing behavior changes. If you go back to prior times when you had inflation, the customer, a lot of times, would trade over to our brands as part of their -- structuring their budget. We're not seeing budget changes on our brands happening at this point but I'm sure if inflation continued. Our customers are telling us they still feel pretty good where they are financially. And for the most part, people are still saving at record levels and things like that.

我沒有——我們沒有看到行為變化。如果您回到之前發生通貨膨脹的時期，那麼很多時候，客戶會將我們的品牌作為他們預算的一部分進行交易。我們目前沒有看到我們品牌的預算發生變化，但我確信通貨膨脹是否會繼續。我們的客戶告訴我們，他們的財務狀況仍然很好。在大多數情況下，人們仍在以創紀錄的水平儲蓄。

Now at some point, if budgets got more constrained, you'd probably start seeing some of that behavior. But the business we're gaining right now is really being created because of the innovation in our product and the quality of the product, and it's really standing on its own.

現在在某個時候，如果預算受到更多限制，您可能會開始看到一些這種行為。但是我們現在獲得的業務實際上是由於我們產品的創新和產品的質量而創造出來的，而且它確實是獨立存在的。

And then secondly, Rodney, are you seeing regional differences in the shifts in the way people moved in and out of e-commerce over the course of the quarter?

其次，羅德尼，您是否看到本季度人們進出電子商務方式的區域差異？

Yes, we would. And it's really wherever COVID is higher, you would see the shift to more online, and that's delivery and pickup. And as it moves north, you would see that within the company.

是的，我們會的。實際上，在 COVID 較高的地方，您會看到更多在線的轉變，那就是交付和取貨。隨著它向北移動，您會在公司內部看到這一點。

And as I mentioned in my prepared remarks, the things that we're especially proud of is almost every customer that were shopping with us digitally early in the quarter that started -- that stopped shopping digitally, they started shopping in the stores. And for us, that's really important as part of our overall strategy for seamless because what we find is, after the first year, an online shopper actually comes into the store more often than they did before they became an online shopper.

正如我在準備好的講話中提到的那樣，我們特別引以為豪的事情是，幾乎所有在本季度初與我們一起進行數字購物的客戶——他們停止了數字購物，他們開始在商店購物。對我們來說，作為我們無縫整體戰略的一部分，這非常重要，因為我們發現，在第一年之後，在線購物者實際上比他們成為在線購物者之前更頻繁地進入商店。

And have you quantified what your total e-commerce did to the operating earnings during the quarter? Is there any way to put a number on that, whether a smaller loss? Or is it trending towards a positive number?

您是否量化了本季度電子商務對營業收入的影響？有什麼辦法可以在上面加上一個數字，是否損失更小？還是趨向正數？

Well, I'll let Gary -- I'll talk a little bit. If you look at within the quarter, obviously, we had the start-up costs of our sheds in Florida and Monroe. So that created a headwind. Obviously, that was reflected in our guidance that we gave for the year and our updated guidance.

好吧，我會讓加里——我會談談。如果你看一下這個季度，很明顯，我們在佛羅里達和門羅的棚子裡有啟動成本。所以這造成了逆風。顯然，這反映在我們今年提供的指導和更新的指導中。

I don't know, Gary, if there's any additional.

我不知道，加里，是否還有其他內容。

Well, I think we talked about, Chuck, the profitability of digital in different ways. When we add in all the fixed costs, we're more on the journey towards profitability, as you are alluding to. We generally focus, though, on what's the pass-through rate on the transactions as we're growing customers because what we find with digital, as you know, is the customer becomes more loyal overall to Kroger, and we see about 50% or so incrementality as the customer engages digitally.

好吧，我想我們談到了，查克，數字化的盈利能力以不同的方式。當我們加上所有固定成本時，正如您所暗示的那樣，我們更多地走上了盈利之路。不過，我們通常會關注交易的通過率，因為我們正在增加客戶，因為我們發現，如您所知，我們通過數字技術發現客戶對 Kroger 的整體忠誠度更高，我們看到大約 50% 或隨著客戶以數字方式參與，因此增量。

As we've talked about previously, we've kind of -- when you think back to last year, we're at mid-single-digit pass-through rate compared to a pass-through rate that will be closer to mid- to high teens on a store transaction. And we're on the path to improving that profitability to drive towards doubling the profit rate on the digital transaction and ultimately targeting to get to parity.

正如我們之前談到的那樣，當您回想起去年時，我們的通過率處於中個位數，而通過率將接近中位數-到商店交易中的青少年。我們正在提高盈利能力，以推動數字交易的利潤率翻倍，並最終實現平價。

I would say we're making good progress on that journey. As I mentioned in my prepared comments, we continue to make solid improvements in the efficiency of picking a digital order. And over time, we'd expect Ocado to play a role in that as well, of course, with the automation they provide. And with media revenue continuing to grow rapidly, that's also creating a tailwind. So I'd say we're seeing good momentum and on track with where we expected to be with that journey in the quarter.

我想說，我們在這段旅程中取得了良好的進展。正如我在準備好的評論中提到的那樣，我們繼續切實提高挑選數字訂單的效率。當然，隨著時間的推移，我們希望 Ocado 也會在其中發揮作用，當然，他們提供的自動化。隨著媒體收入繼續快速增長，這也產生了順風。所以我想說，我們看到了良好的勢頭，並且在本季度我們預期的旅程中處於正軌。

Good luck on the rest of the year.

祝你在今年剩下的時間裡好運。

Thank you, Chuck.

謝謝你，查克。

Your next question comes from Edward Kelly with Wells Fargo.

您的下一個問題來自富國銀行的 Edward Kelly。

Yes. I wanted to ask about share repo and the cash balance. So you ended the quarter with a lot of cash. Again, you're well below your leverage target. Thoughts on the buyback. Is the stock attractive here, I guess, is a straightforward question? And what are your thoughts on taking out additional debt to buy back stock? Because with the dry powder that's there, I mean, it seems like you could probably take out north of 10% of the shares. Is this a bigger part of delivering 8% to 11% next year? Just kind of curious as to how we should be thinking about all this.

是的。我想問一下股票回購和現金餘額。所以你在本季度結束時有很多現金。同樣，您遠低於您的槓桿目標。關於回購的想法。我想，這裡的股票有吸引力嗎，這是一個直截了當的問題？您對承擔額外債務以回購股票有何看法？因為有了那裡的干粉，我的意思是，你似乎可以取出 10% 的股份。這是明年實現 8% 到 11% 的更大比例嗎？只是有點好奇我們應該如何思考這一切。

Yes. Thanks for the question, Ed. I would say, overall, we're not changing our overall financial strategy. As we think about our free cash flow, we continue to start with how can we invest in the business to grow it profitably and sustain growth, and we still think there's lots of opportunity to accelerate the model.

是的。謝謝你的問題，埃德。我想說，總的來說，我們不會改變我們的整體財務戰略。當我們考慮我們的自由現金流時，我們繼續從我們如何投資業務以實現盈利增長和維持增長開始，我們仍然認為有很多機會來加速這種模式。

As we -- I think we alluded to a little bit of this at our last Investor Day, our goal over time would be to be stretching our top line growth and our overall earnings growth, so the focus for excess free cash flow is certainly looking for where the opportunities as we believe we can continue to lead with fresh and accelerate with digital to drive that growth. We're certainly going to look at any of those incremental investments against the bar of saying, "Is that going to drive a stronger return for investors versus buying back incremental stock?"

正如我們 - 我認為我們在上一個投資者日提到了這一點，隨著時間的推移，我們的目標將是擴大我們的收入增長和我們的整體收益增長，因此超額自由現金流的關注點肯定在尋找因為我們相信我們可以繼續以新鮮的方式引領機遇，並通過數字技術加速以推動增長。我們肯定會考慮這些增量投資中的任何一個，而不是說“與回購增量股票相比，這會為投資者帶來更大的回報嗎？”

But within our overall framework today, as we obviously continue to invest in the business to grow, we are committed to continuing to return cash to shareholders at the level that we've shared in our current TSR model. As you've heard us say, we increased the dividend by 17% to reflect really our confidence that we expect to come out of COVID at a higher position from an operating profit perspective as we leave 2021. And and we continued to buy back stock during the quarter and would expect to continue to buy back stock at the current price.

但在我們今天的整體框架內，隨著我們顯然繼續投資於業務以實現增長，我們致力於繼續以我們在當前 TSR 模型中共享的水平向股東返還現金。正如您聽到我們所說，我們將股息提高了 17%，以真正反映我們的信心，即在我們離開 2021 年時，從營業利潤的角度來看，我們希望從 COVID 中走出來並處於更高的位置。而且我們繼續回購股票在本季度期間，預計將繼續以當前價格回購股票。

We do leverage a grid. I think I've referred to this before. So think about it as depending on where the share price is. That -- if the share price is lower, it buys back more stock during the quarter. If the share price is higher, it buys back less stock because we're not trying to time anything in the market. We're already trying to make sure that we're maximizing the return on the dollars as we go through the year to take advantage of fluctuations in the prices as it happens during a difficult trading period.

我們確實利用了網格。我想我以前提到過這個。因此，可以將其視為取決於股價的位置。那 - 如果股價較低，它會在本季度回購更多股票。如果股價更高，它會回購更少的股票，因為我們沒有試圖在市場上計時。我們已經在努力確保我們在這一年中最大化美元的回報，以利用在困難交易期間發生的價格波動。

But we certainly remain committed to returning cash to investors. We start with the excess cash from a point of view of saying where could we accelerate our growth. And ultimately, we'll share more on that as we identify those opportunities. And we'll continue to flex, if we believe that there aren't those opportunities then obviously, we'll look to make sure we are dynamic in making sure we're deploying excess cash.

但我們當然仍然致力於向投資者返還現金。我們從多餘的現金開始，從我們可以在哪裡加速增長的角度出發。最終，我們將在確定這些機會時分享更多信息。我們將繼續靈活調整，如果我們認為沒有這些機會，那麼顯然，我們將確保我們在確保我們部署多餘現金方面保持活力。

Okay. Great. And just a quick follow-up on the gross margin. Is the 2-year number for Q2, is that a good way to think about the back half? Or with inflation accelerating and supply chain, does that headwind grow a little bit in the back half? Just curious as to how we should be thinking about that.

好的。偉大的。只是對毛利率的快速跟進。 Q2 的 2 年數字是考慮後半部分的好方法嗎？或者隨著通貨膨脹加速和供應鏈，這種逆風在後半部分會增加一點嗎？只是好奇我們應該如何思考這個問題。

Yes. I think actually, Q2 is a pretty good sort of overall -- I'm going to -- again, we don't get into specific numbers. But I think, directionally, it's a helpful way to think about the back half of the year.

是的。我認為實際上，第二季度總體上是一個相當不錯的類型——我會——再說一次，我們沒有進入具體的數字。但我認為，從方向上講，這是思考下半年的一種有用方式。

As you think about overall earnings, we would think gross margin continued to be a headwind, part of that being warehouse and transportation, part of it being shrink. We're also continuing to invest in the business where we think it makes sense and give value to customers.

當您考慮整體收益時，我們認為毛利率仍然是一個不利因素，其中一部分是倉庫和運輸，一部分是收縮。我們還將繼續投資於我們認為有意義並為客戶帶來價值的業務。

OG&A will continue to be a tailwind, but we will see less COVID cycling, if you like, in the back half of the year. So that's why the overall impact on operating profit won't be as strong in the back half of the year. But I -- if you think about Q2, in general, outside of that cycling of extra COVID costs last year in the first half of the year I think is a pretty good way to think about the back half of the half of the year, Ed.

OG&A 將繼續成為順風，但如果您願意，我們將在今年下半年看到更少的 COVID 循環。這就是為什麼下半年對營業利潤的整體影響不會那麼強烈的原因。但是我——如果你考慮第二季度，一般來說，除了去年上半年的額外 COVID 成本循環之外，我認為這是考慮下半年的一個很好的方式，埃德。

Our next question comes from Michael Montani with Evercore ISI.

我們的下一個問題來自 Evercore ISI 的 Michael Montani。

Great. I was just hoping to get a little bit of incremental color around the ID sales. Has the transaction count turned positive at this point? And then secondly, if you could provide some incremental color around how much inflation you were able to kind of pass through to consumers vis-à-vis what you saw in COGS, just because at times, in the past, you have given some helpful context there?

偉大的。我只是希望能在 ID 銷售中獲得一些增量色彩。此時交易計數是否變為正數？其次，如果你能提供一些關於你能夠傳遞給消費者的通脹的增量顏色，與你在 COGS 中看到的相比，只是因為有時，在過去，你提供了一些有用的信息上下文在那裡？

Yes. If you look at transaction count, we would continue to have a slightly declining or kind of flat transaction count. It really depends on if you're looking at versus prior year or 2 years.

是的。如果您查看交易數量，我們將繼續略微下降或持平交易數量。這真的取決於你看的是前一年還是兩年。

If you look at basket size per purchase, it's significantly increased in terms of when customers come into the store, they buy significantly more; or if you look at our online shop customer, that customer's basket size is significantly higher than a basket when somebody comes into a store. So both from a digital standpoint and individual transaction standpoint, customers are significantly buying more.

如果您查看每次購買的購物籃大小，就客戶進入商店時而言，它顯著增加，他們購買的東西顯著增加；或者，如果您查看我們的在線商店客戶，當有人進入商店時，該客戶的購物籃尺寸明顯高於購物籃。因此，無論從數字角度還是個人交易角度來看，客戶的購買量都顯著增加。

And it's all -- it's really 3 things. One, they're buying more. They're also buying premiumization of product where they've upgraded the products they buy, and they also are buying bigger-sized products as well. So if you think about toilet paper, very few customers now can or will even buy a 4 pack of toilet paper, where most customers now are buying 24 pack or even bigger in some cases.

這就是全部 - 這實際上是三件事。一，他們買的更多。他們還在購買升級產品的高端產品，他們也在購買更大尺寸的產品。因此，如果您考慮衛生紙，現在很少有客戶可以甚至會購買 4 包衛生紙，而大多數客戶現在購買 24 包甚至在某些情況下更大。

In terms of the inflation, Gary, I'll let you answer Michael's question on that.

關於通貨膨脹，加里，我會讓你回答邁克爾的問題。

Thanks for the question, Michael. Yes, we've laid out before, I know, on the call, we have a very robust process for how we manage when we see inflationary costs flowing through from suppliers. And first of all, we challenge to make sure that we feel confident they're legitimate because, obviously, we want to make sure that they truly are structural cost changes. And then if they are, we absolutely have a process for passing them on to the customer.

謝謝你的問題，邁克爾。是的，我知道，在電話會議上，我們之前已經制定了一個非常強大的流程來管理當我們看到供應商產生的通貨膨脹成本時我們如何管理。首先，我們挑戰確保我們確信它們是合法的，因為顯然，我們希望確保它們確實是結構性成本變化。如果是這樣，我們絕對有一個將它們傳遞給客戶的流程。

I would say that, generally, we've been very comfortable with our ability to pass on the increases that we've seen at this point, and we would expect that to continue to be the case looking into the back half of the year. As you saw during the quarter, we are, though, continuing to invest in price where we think it makes sense. Sometimes that might be in areas where we're seeing inflation. Sometimes it might be we're investing because we believe it's the right thing to do to grow customer long-term loyalty in other places through our personalization strategies.

我想說的是，總的來說，我們對我們目前看到的增長的能力感到非常滿意，我們預計這種情況將在今年下半年繼續保持下去。正如您在本季度看到的那樣，我們仍在繼續投資於我們認為合理的價格。有時這可能發生在我們看到通貨膨脹的地區。有時我們可能正在投資，因為我們相信通過我們的個性化策略在其他地方提高客戶長期忠誠度是正確的做法。

So overall, we feel good about the way in which we're able to manage the inflation within the business. At the same time, we are continuing to invest because we believe that's going to be important to grow share over the long term as well.

因此，總體而言，我們對我們能夠管理企業內部通貨膨脹的方式感覺良好。與此同時，我們將繼續投資，因為我們相信這對於長期增長份額也很重要。

Your next question comes from Karen Short with Barclays.

您的下一個問題來自 Barclays 的 Karen Short。

Karen, are you there?

凱倫，你在嗎？

Oh, sorry. can You hear me now?

哦對不起。你能聽到我嗎？

Yes.

是的。

Yes.

是的。

Sorry about that. Yes. So I had a couple of questions just related to guidance. Gary, you mentioned that the vaccine admin fee kind of netted out with respect to other initiatives that you had in, I guess, health and wellness in general. I'm just wondering if you could give a little more color on that because it was very sizable and one of your competitors in terms of basis point contribution to gross margin.

對於那個很抱歉。是的。所以我有幾個與指導有關的問題。加里，您提到疫苗管理費與您在總體上的健康和保健方面的其他舉措有關。我只是想知道您是否可以對此進行更多說明，因為它非常龐大，並且在基點對毛利率的貢獻方面是您的競爭對手之一。

And then other model questions that I just wanted to clarify were what your actual LIFO expectations are for the year because that's obviously relevant for EPS and then what your COVID costs were in the quarter and what your expectations for COVID costs will be for the rest of the year. And then I had one other bigger-picture question.

然後我只是想澄清的其他模型問題是您對該年度的實際 LIFO 期望是什麼，因為這顯然與 EPS 相關，然後是您在本季度的 COVID 成本是多少，以及您對 COVID 成本的預期將是什麼那一年。然後我還有另一個更大的問題。

Sure. Thanks, Karen. On the pharmacy side of things, yes, so essentially, as you know, we operate little clinics as well in a number of our stores, and multiple of our stores have little clinic facilities. And in our pharmacy core business, we continue to support the COVID vaccines.

當然。謝謝，凱倫。在藥房方面，是的，所以基本上，如您所知，我們在許多商店也經營小型診所，我們的多家商店幾乎沒有診所設施。在我們的藥房核心業務中，我們繼續支持 COVID 疫苗。

So my comment earlier was, when you look at the total health and wellness business, as we pivoted resources to do more COVID vaccinations and as we provided that support, whether it be through off-site locations or through our own facilities, and you look at the total impact of the pharmacy business as customers shifted to more COVID vaccines and less of the newer prescriptions, if you like, even though we grew script count overall during the quarter and continue to grow script count. If I look at the total impact on the health and wellness business for the quarter and the year-to-date, there wouldn't be a material overall outside of business plan performance. Although certainly, if you look to the COVID vaccines in isolation, they would have created an incremental value to the health and wellness business, but it was offset by lower revenue or lower margin impact on other parts of that business, so netted out to being on plan, if you like.

因此，我之前的評論是，當您查看整個健康和保健業務時，當我們將資源轉移到進行更多 COVID 疫苗接種以及我們提供支持時，無論是通過異地地點還是通過我們自己的設施，您看起來隨著客戶轉向更多的 COVID 疫苗和更少的新處方，藥房業務的總體影響，如果你願意的話，即使我們在本季度總體上增加了腳本數量並繼續增加腳本數量。如果我看一下本季度和年初至今對健康和保健業務的總體影響，除了商業計劃的表現之外，不會有重大的整體影響。雖然可以肯定的是，如果你孤立地看待 COVID 疫苗，它們會為健康和保健業務創造增量價值，但它被收入下降或對該業務其他部分的較低利潤率影響所抵消，因此被抵消為計劃中，如果你喜歡。

And as we look at the back half of the year, I wouldn't expect it to be a reason that we have an incremental headwind in margin because of having less COVID vaccinations in the back half of the year as things start to return. So certainly, we expect some vaccines in the back half of the year, but things start to return a little bit more to normal and less of a spike in vaccines compared to what we saw in the first half of the year.

當我們回顧今年下半年時，我不認為這會成為我們的利潤增加逆風的原因，因為隨著事情開始恢復，下半年 COVID 疫苗接種的數量減少了。因此，當然，我們預計今年下半年會出現一些疫苗，但與我們在今年上半年看到的情況相比，情況開始稍微恢復正常，疫苗的激增也減少了。

From a LIFO perspective, as you -- I think you probably know, it's not really an easy thing to predict because LIFO was a charge, is one data point at the end of the year. As we looked at the data point so far this year, we're seeing an inflation. We use those spots to predict where it would be. I think the best guidance we could give you is if you take the year-to-date performance in LIFO that we've charged to the P&L and then gross that up effectively for the full year, that would be essentially our full year expectation based on the data points that we've seen to this point in the year in our outlook.

從 LIFO 的角度來看，就像你一樣——我想你可能知道，這並不是一件容易預測的事情，因為 LIFO 是一項收費，是年底的一個數據點。當我們查看今年迄今為止的數據點時，我們看到了通貨膨脹。我們使用這些點來預測它會在哪裡。我認為我們能給你的最好的指導是，如果你把我們已經計入損益表的 LIFO 的年初至今表現，然後在全年有效地總計，這基本上是我們基於全年的預期關於我們在今年的展望中看到的數據點。

But FIFO -- I'm sorry, LIFO, I beg your pardon, is notoriously difficult to predict, so we're giving you our best estimate. But at the end of the day, it will be driven by accounting rules and a data point towards the end of the year. But I think the best indication we can give you at this point is to use the year-to-date performance and gross that up for the year is our best estimate.

但是先進先出——對不起，後進先出，對不起，眾所周知，很難預測，所以我們給你最好的估計。但歸根結底，它將受到會計規則和年底數據點的推動。但我認為此時我們可以給你的最好的指示是使用年初至今的表現，而今年的總表現是我們的最佳估計。

In essence, annualized. And so divided by 7 times...

本質上是年化的。所以除以7倍...

Exactly, exactly. Yes.

正是，正是。是的。

Right. And then just COVID?

對。然後只是COVID？

Costs for the quarter...

本季度費用...

Yes. So as I mentioned earlier, we certainly saw significantly greater costs in the first half of last year. As a company, we adapted and learned how to operate more efficiently. We would certainly see continued COVID costs in the back half of this year but cycling less costs from last year. We would expect it to be south of $100 million a quarter. But certainly, we're still seeing incremental costs.

是的。因此，正如我之前提到的，我們肯定在去年上半年看到了顯著增加的成本。作為一家公司，我們適應並學習瞭如何更有效地運營。我們肯定會在今年下半年看到持續的 COVID 成本，但與去年相比，循環成本會降低。我們預計每季度將低於 1 億美元。但可以肯定的是，我們仍然看到增加的成本。

And some of the areas that you would probably expect when you think about how we're continuing to operate through COVID, we still have masks costs during the quarter. We still have cleaning costs. We still have extended leave of absence for any associates that are identified as having the COVID virus -- been diagnosed as a positive COVID case.

當您考慮我們如何通過 COVID 繼續運營時，您可能會期望的一些領域，我們在本季度仍然有口罩成本。我們還有清潔費。對於任何被確定為感染了 COVID 病毒的員工，我們仍然延長了休假時間——被診斷為 COVID 陽性病例。

So those would be the kind of costs that we would see, and we'd expect it to be a little bit less than $100 million a year -- sorry, a quarter, I beg your pardon, as we look at the back half of the year and still being a slight tailwind year-over-year but nothing like what we have seen in the first half of 2020.

所以這就是我們會看到的那種成本，我們預計它每年會略低於 1 億美元——抱歉，四分之一，請原諒，因為我們看的是後半部分這一年，與去年同期相比仍然略有順風，但與我們在 2020 年上半年看到的情況完全不同。

Okay. And then just my bigger-picture question is on Florida, so with respect to Ocado. Curious, Rodney, on your early learnings from Florida and whether you think that you may want to emphasize opening sheds in markets where you actually don't have physical retail locations. Or any thoughts on where you're at on that philosophy in terms of markets where you have high market share, markets where you have middle market share or markets where you have no presence based on what you know so far?

好的。然後我的大局問題是關於佛羅里達的，所以關於 Ocado。好奇，羅德尼，關於你從佛羅里達的早期學習，以及你是否認為你可能想要強調在你實際上沒有實體零售店的市場開設棚屋。或者根據您目前所了解的情況，您有什麼想法在您擁有高市場份額的市場、您擁有中等市場份額的市場或您沒有存在的市場方面的理念？

Yes. It's a great question, but we're still early in the process of answering that. And if you look in Florida, we are tracking ahead of where we thought we would be at this point. And the thing that I'm especially proud of our teams in Florida is our Net Promoter Scores are incredibly strong. I mean, mind-boggling strong and made up in the neighborhood of best-in-class across all industries. And as you know, food retail usually struggles with having Net Promoter Scores that are up in the Apple neighborhood and things like that. So I'm incredibly proud of what our teams are doing in terms of creating the experience for the customer.

是的。這是一個很好的問題，但我們仍處於回答的早期階段。如果你看看佛羅里達州，我們正在跟踪我們目前認為我們會到達的地方。我為我們在佛羅里達的團隊感到特別自豪的是我們的淨推薦值非常高。我的意思是，令人難以置信的強大，並且在所有行業中都是一流的。如您所知，食品零售業通常會在 Apple 社區的淨推薦值和類似情況下苦苦掙扎。因此，我為我們的團隊在為客戶創造體驗方面所做的工作感到無比自豪。

And I appreciate and like your question. I would say we're still early in the process, and we continue to learn every day on our ability to ramp up a facility in a new market. Certainly, it's easier communicating to the customer in new markets or markets where our share isn't as high. And that was one of the reasons why we picked Florida and picked Monroe here outside of Cincinnati was to learn how to integrate it within our existing infrastructure and then having something from the ground up. And I would expect, over time, we'll learn how to do both of them, and we'll be really happy with the results.

我很欣賞並喜歡你的問題。我想說我們仍處於早期階段，我們每天都在繼續學習我們在新市場中增加設施的能力。當然，在我們的份額不高的新市場或市場中，與客戶溝通會更容易。這就是我們選擇佛羅里達州並在辛辛那提以外選擇夢露的原因之一，是為了學習如何將它集成到我們現有的基礎設施中，然後從頭開始。我希望，隨著時間的推移，我們將學會如何做到這兩點，我們會對結果感到非常滿意。

Your last question comes from Rupesh Parikh with Oppenheimer.

您的最後一個問題來自 Rupesh Parikh 和 Oppenheimer。

So I guess just going back to the gross margin headwinds during the quarter that you saw. Today, you called out shrink in supply chain. It sounds like that may be half the pressure that you saw during the quarter. I was curious if you see those headwinds on the shrink and supply chain at all transitory.

所以我想回到你看到的那個季度的毛利率逆風。今天，您在供應鏈中呼籲收縮。聽起來這可能是您在本季度看到的壓力的一半。我很好奇你是否看到收縮和供應鏈上的逆風是暫時的。

I think incrementally, yes. But if you look at shrink, I think shrink will remain higher. Now we will go through and do all kinds of process changes to try to minimize shrink, but we are being more aggressive. And Christine Wheatley, who's our General Counsel, is also working with some trade associations to try to start working on it in a broader group, not just Kroger-specific when you look at organized crime. And I know I was reading Home Depot's earnings call, and they talked about the same thing.

我逐漸認為，是的。但如果你看收縮率，我認為收縮率會更高。現在我們將經歷並進行各種工藝更改以盡量減少收縮，但我們正在變得更加積極。我們的總法律顧問克里斯汀·惠特利（Christine Wheatley）也在與一些行業協會合作，試圖在一個更廣泛的群體中開展工作，而不僅僅是針對有組織犯罪的克羅格。而且我知道我正在閱讀家得寶的收益電話，他們談到了同樣的事情。

So we do believe that will be important to partner with the government and the way products are able to be sold in the marketplace. So I do think there's things we will do to improve, but some of it will be a headwind until we're able to address that.

因此，我們相信與政府合作以及產品在市場上的銷售方式非常重要。所以我確實認為我們會做一些事情來改進，但在我們能夠解決這個問題之前，其中一些將是一個逆風。

On supply chain, I think an awful lot of that will be transitory, but you still have to manage through it.

在供應鏈上，我認為其中很多都是暫時的，但你仍然必須通過它來管理。

Okay. Great. And then maybe just one follow-up question. We're hearing more and more from suppliers lately of challenges in the supply chain and being able to fulfill all the consumer demand out there. So I was just curious how your out of stocks right now trending versus what you've seen in recent months?

好的。偉大的。然後也許只是一個後續問題。最近，我們從供應商那裡聽到越來越多的供應鏈挑戰，並能夠滿足所有消費者的需求。所以我只是好奇你現在的缺貨趨勢與你最近幾個月看到的情況相比如何？

Yes. I would say that we're slightly higher. Now our teams had, going in, been continuing to aggressively forward buy inventory. Originally, it was because of the inflation pressures. It's ended up because of some of the supply chain issues. It's also one of the benefits of a lot of our own brands, and we manufacture a lot of our own brands. So our plants are aggressively pushing capacity. So I would say that it is a headwind. It's slightly worse than it was, but we continue to work on minimizing and maximizing the in-stocks.

是的。我會說我們稍微高一點。現在我們的團隊已經進入，繼續積極向前購買庫存。最初是因為通脹壓力。由於一些供應鏈問題，它最終結束了。這也是我們很多自有品牌的好處之一，我們製造了很多自有品牌。因此，我們的工廠正在積極提升產能。所以我會說這是逆風。它比以前稍微差了一點，但我們會繼續努力最小化和最大化庫存。

Before we conclude today's call, I'd like to take a moment to remember the tragic event that took place nearly 20 years ago tomorrow and to honor the lives lost on September 11, 2001.

在結束今天的電話會議之前，我想花點時間來紀念發生在將近 20 年前的明天的悲慘事件，並緬懷 2001 年 9 月 11 日逝去的生命。

And as always, I'd like to take a moment to address our associates who are listening in. Thank you for delivering an outstanding performance this quarter and continuing to support our communities through the pandemic.

與往常一樣，我想花點時間向我們的同事們致辭。感謝您在本季度的出色表現，並繼續支持我們的社區度過大流行。

As the number of COVID-19 cases continue to rise due to the rapid spread of the Delta variant, I want to affirm that health and safety of our associates and customers remain our top priority. We are doing everything we can do to make sure the vaccine is accessible and available to you and our customers wherever they are. I am so proud of our Kroger Health team who have already administrated 6.7 million doses of the COVID-19 vaccine. Thank you to our talented health care professionals for being there for our communities and for addressing questions for our customers about the vaccine and about getting the vaccine.

由於 Delta 變體的迅速傳播，COVID-19 病例的數量繼續上升，我想確認我們的員工和客戶的健康和安全仍然是我們的首要任務。我們正在竭盡全力確保您和我們的客戶無論身在何處都能獲得和使用疫苗。我為我們的 Kroger Health 團隊感到非常自豪，他們已經接種了 670 萬劑 COVID-19 疫苗。感謝我們才華橫溢的醫療保健專業人員為我們的社區服務，並為我們的客戶解決有關疫苗和接種疫苗的問題。

I'm often reminded of the impact our associates have on the lives of our customers. Recently, one of our pharmacy managers in Atlanta saved a life of a customer that was having an allergic reaction in one of our stores. This is just one of the many examples that in extraordinary ways our associates care for those around them. Thank you for inspiring me every day, and thank you for all you do every day to be there for our customers, our communities and each other.

我經常想起我們的員工對客戶生活的影響。最近，我們在亞特蘭大的一位藥房經理挽救了一位在我們一家商店發生過敏反應的顧客的生命。這只是我們的員工以非凡的方式關心他們周圍的人的眾多例子之一。感謝您每天都在激勵我，感謝您每天為我們的客戶、我們的社區和彼此所做的一切。

That concludes today's call.

今天的電話會議到此結束。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。