克羅格 (KR) 2023 Q2 法說會逐字稿

Good morning, and welcome to The Kroger Co. Second Quarter 2023 Earnings Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to Rob Quast, Senior Director of Investor Relations. Please go ahead.

早上好，歡迎參加克羅格公司 2023 年第二季度收益電話會議。請注意，此事件正在被記錄。我現在想將會議交給投資者關係高級總監 Rob Quast。請繼續。

Good morning. Thank you for joining us for Kroger's Second Quarter 2023 Earnings Call. I am joined today Kroger's Chairman and Chief Executive Officer, Rodney McMullen; and Chief Financial Officer, Gary Millerchip.

早上好。感謝您參加克羅格 2023 年第二季度財報電話會議。今天加入克羅格董事長兼首席執行官羅德尼·麥克穆倫 (Rodney McMullen) 的行列；和首席財務官加里·米勒奇普。

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 company assumes no obligation to update that information.

我想提醒您，今天的討論將包括前瞻性陳述。我們想提醒您，此類陳述只是預測，實際事件或結果可能存在重大差異。我們向 SEC 提交的文件中詳細討論了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。克羅格公司不承擔更新該信息的義務。

After our prepared remarks, we look forward to taking your questions. Given the breadth of information that will be covered on the call and our divestiture announcement earlier this morning, we will extend our Q&A session if needed to ensure that we can cover a broad range of topics from as many of you as we can. (Operator Instructions)

在我們準備好發言後，我們期待回答您的問題。鑑於電話會議將涵蓋的信息廣泛以及我們今天早上早些時候的剝離公告，如果需要，我們將延長問答環節，以確保我們能夠涵蓋盡可能多的廣泛主題。 （操作員說明）

I will now turn the call over to Rodney.

我現在將把電話轉給羅德尼。

Thank you, Rob. Good morning, everyone, and thank you for joining us today. Before we begin, I'd like to take a moment to outline the framework for our discussion this morning given that we have several important topics to cover. I will begin by covering the consumer environment and how the strength of our value creation model is supporting earnings growth and generating strong free cash flow.

謝謝你，羅布。大家早上好，感謝您今天加入我們。在開始之前，我想花點時間概述一下今天上午討論的框架，因為我們有幾個重要的主題要討論。我將首先介紹消費者環境以及我們的價值創造模式的優勢如何支持盈利增長並產生強勁的自由現金流。

Then Gary will cover our financial results and highlights as well as provide an update on our nationwide opioid settlement framework. Finally, I will conclude with some brief comments on the divestiture plan press release we issued earlier this morning. We are excited about sharing our plans for this important milestone, and we look forward to taking your questions during the Q&A segment of today's call.

然後加里將介紹我們的財務業績和亮點，並提供我們全國阿片類藥物結算框架的最新信息。最後，我將對我們今天上午早些時候發布的剝離計劃新聞稿進行一些簡短的評論。我們很高興分享我們針對這一重要里程碑的計劃，並期待在今天電話會議的問答環節中回答您的問題。

Now turning to our second quarter. Kroger continues to effectively navigate a challenged environment and delivered another quarter of consistent results. As economic uncertainty persists, the strength of our model is enabling us to deliver value for our customers, continue to invest in our associates and deliver consistent shareholder return. Revenue remains top of mind for many of our customers as they are balancing several factors that are impacting their food at home spending.

現在轉向我們的第二季度。克羅格繼續有效應對充滿挑戰的環境，並在另一個季度取得了一致的業績。隨著經濟不確定性持續存在，我們模式的優勢使我們能夠為客戶創造價值，繼續投資於我們的員工並提供一致的股東回報。對於我們的許多客戶來說，收入仍然是首要考慮因素，因為他們正在平衡影響家庭食品支出的幾個因素。

The effect of sustained inflation, reduced government benefits including SNAP and higher interest rates have pressured customer spending, especially for those on a tight budget. To support our customers, we are delivering increased value through our robust Our Brands portfolio, personalized digital offers, fuel rewards and loyalty discounts, including weekly specials and yellow tag promotions.

持續的通貨膨脹、包括 SNAP 在內的政府福利減少以及利率上升的影響給客戶支出帶來了壓力，特別是對於那些預算緊張的人來說。為了支持我們的客戶，我們通過強大的品牌組合、個性化數字優惠、燃油獎勵和忠誠度折扣（包括每週特價和黃標促銷）提供更高的價值。

Economic instability continues to impact customer segments differently. We are seeing this in their shopping behaviors. Higher income households continue to engage more deeply with us, enjoying our customer experience with zero compromise on convenience, quality and value. These customers are especially valuable to our mix as they purchase bigger pack sizes, shop more Fresh categories and trade up to more premium Our Brands products.

經濟不穩定繼續對客戶群產生不同的影響。我們在他們的購物行為中看到了這一點。高收入家庭繼續與我們進行更深入的接觸，享受我們在便利性、質量和價值上零妥協的客戶體驗。這些客戶對我們的產品組合特別有價值，因為他們購買更大的包裝尺寸、購買更多的生鮮品類併購買更優質的我們品牌的產品。

On the other hand, budget-conscious households are facing external spending pressures. These customers are buying smaller pack sizes and, at times, prioritizing the lowest shelf price. These customers are building smaller baskets and switching to lower-priced items to stretch their budgets. They are also exhibiting spending patterns that ebb and flow with payroll periods and SNAP benefit distributions.

另一方面，精打細算的家庭正面臨外部支出壓力。這些客戶購買較小的包裝尺寸，有時會優先考慮最低的貨架價格。這些顧客正在購買更小的購物籃，並轉而購買價格較低的商品，以節省預算。他們還表現出隨著工資發放期和 SNAP 福利分配而起伏的支出模式。

We expect these broader economic headwinds to continue pressuring customer spending in the second half of the year. While the environment is difficult we are never satisfied with sales and we are focused on driving more units in the back half of the year. Our teams are sharpening store execution, identifying basket add-ons and adapting to customers' evolving needs.

我們預計這些更廣泛的經濟逆風將繼續給今年下半年的客戶支出帶來壓力。儘管環境很困難，但我們對銷售永遠不會滿意，我們的重點是在下半年推動更多的銷售。我們的團隊正在提高商店執行力，確定購物籃附加產品並適應客戶不斷變化的需求。

We saw an improvement in our budget-conscious household trends since last quarter as we expanded our assortment of everyday staples at lower price points. And as an example, we introduced new in-store displays where every item is below $3. Additionally, we continue to improve price position relative to key competitors, demonstrating our long-term commitment to provide customers with exceptional value.

自上季度以來，隨著我們以較低的價格擴大了日常必需品的種類，我們看到了注重預算的家庭趨勢有所改善。舉個例子，我們推出了新的店內展示，每件商品的價格都低於 3 美元。此外，我們繼續提高相對於主要競爭對手的價格地位，體現了我們為客戶提供卓越價值的長期承諾。

We are creating more engagement with customers through personalization, offering more targeted and effective promotions and our seamless ecosystem is resonating with customer needs. And it allows us to drive increased loyalty. And customers are rewarding us for this work. The second quarter represented our ninth consecutive quarter of total household growth. And now I'll provide more detail on how our go-to-market strategy is delivering for our customers.

我們通過個性化與客戶建立更多的互動，提供更有針對性和更有效的促銷活動，我們的無縫生態系統正在滿足客戶的需求。它使我們能夠提高忠誠度。客戶對我們的這項工作給予了獎勵。第二季度是我們家庭總收入連續第九個季度增長。現在我將提供更多有關我們的上市策略如何為客戶提供服務的詳細信息。

We are reimagining our offerings throughout our portfolio of Our Brands. With more than 13,000 products available, customers can enjoy a wide range of high-quality alternatives to fit each customer's budget. Additionally, we are improving the profitability of Our Brands. Through our brand architect work, we are ensuring each brand plays a unique role on the shelf. Last year's introduction of our opening price point brand, Smart Way, provides a great option for those prioritizing the lowest price at the shelf, and it is resonating with our customers.

我們正在重新構想我們整個品牌組合的產品。擁有超過 13,000 種產品可供選擇，客戶可以享受各種高質量的替代品，以滿足每個客戶的預算。此外，我們正在提高我們品牌的盈利能力。通過我們的品牌架構師工作，我們確保每個品牌在貨架上發揮獨特的作用。去年我們推出的開放價格品牌 Smart Way 為那些優先考慮貨架最低價格的人提供了一個很好的選擇，並且引起了我們客戶的共鳴。

Turning to Seamless, strong growth in our pickup and delivery businesses led to another excellent quarter in digital. This growth was underscored by a rise in both households and traffic. Our digital team's relentless pursuit of improving the customers' experience is driving our success.

轉向Seamless，我們的提貨和送貨業務強勁增長，帶來了數字化領域另一個出色的季度。家庭和交通量的增加凸顯了這種增長。我們的數字團隊對改善客戶體驗的不懈追求推動著我們的成功。

We scaled our hands-free technology across the company to improve speed and expanded pickup options with automated pods and lockers, improving productivity and providing customers with more flexibility. Our in-store associates are also playing a critical role in our success. This quarter, they reduced wait time, lowered cost to serve and improved fill rates.

我們在整個公司範圍內擴展了免提技術，以提高速度，並通過自動化吊艙和儲物櫃擴大了取貨選項，從而提高了生產力並為客戶提供了更大的靈活性。我們的店內員工也在我們的成功中發揮著關鍵作用。本季度，他們減少了等待時間，降低了服務成本並提高了填充率。

Pickup has had a positive incremental contribution for some time. In multiple divisions now, our pickup business today is now profitable on a fully loaded basis. And by continuing to scale our operations, we have a clear path to sustainable profitability and pickup.

一段時間以來，皮卡一直在做出積極的增量貢獻。現在，在多個部門，我們的皮卡業務現已在滿載的基礎上實現盈利。通過繼續擴大業務規模，我們有一條明確的可持續盈利和增長之路。

Next, on personalization. Personalization enables us to meet our customers' unique needs and deliver value beyond the product shelf price. Our best-in-class data science work powered by our loyalty data is driving strong digital engagement. So far this year, customers have clipped more than 2 billion digital offers. To me, that's just an amazing number when you think about 2 billion. We've also increased our digitally engaged households by 1.2 million compared to last year. This growth is important to our model as digitally engaged households are more loyal, spend nearly 3x more with us and help grow our alternative profit businesses like Kroger Precision Marketing.

接下來，關於個性化。個性化使我們能夠滿足客戶的獨特需求，並提供超出產品貨架價格的價值。我們由忠誠度數據提供支持的一流數據科學工作正在推動強大的數字參與。今年到目前為止，客戶已經取消了超過 20 億次數字優惠。對我來說，20 億是一個驚人的數字。與去年相比，我們的數字化家庭數量還增加了 120 萬。這種增長對我們的模式很重要，因為參與數字化的家庭更加忠誠，在我們身上的花費增加了近 3 倍，並有助於發展我們的另類利潤業務，例如 Kroger Precision Marketing。

Now I'd like to share more about how our diversified business model continued to support earnings growth this quarter and gives us confidence in our ability to navigate the environment ahead. Starting with our alternative profit businesses. Alternative profits had an impressive second quarter led by strong growth in our retail media business, Kroger Precision Marketing. Our seamless ecosystem continues to drive and track data and traffic which benefits this business. KPM applies these insights in its data science to build custom audiences and precisely measure return on ad spend delivering significant value to clients.

現在，我想更多地分享我們的多元化業務模式如何繼續支持本季度的盈利增長，並讓我們對應對未來環境的能力充滿信心。從我們的另類利潤業務開始。在我們的零售媒體業務克羅格精準營銷的強勁增長帶動下，第二季度另類利潤令人印象深刻。我們的無縫生態系統繼續驅動和跟踪數據和流量，這有利於該業務。 KPM 將這些見解應用於其數據科學中，以建立自定義受眾並精確衡量廣告支出回報，為客戶提供重大價值。

This quarter, KPM announced a new in-house advertising platform, which allows greater flexibility to serve clients and improve outcomes for brands.

本季度，KPM 宣布了一個新的內部廣告平台，該平台可以更靈活地服務客戶並改善品牌成果。

Kroger Health is another important component of our business that allows us to help customers live better lives and strengthen our model. The terminated agreement with ESI has freed up some capacity in our pharmacies, and our Kroger Health teams are doing a great job of utilizing that capacity. Our pharmacists are dedicating more time to patient care and delivering better patient experiences.

Kroger Health 是我們業務的另一個重要組成部分，它使我們能夠幫助客戶過上更好的生活並加強我們的模式。與 ESI 的終止協議釋放了我們藥房的一些能力，我們的 Kroger Health 團隊在利用這些能力方面做得很好。我們的藥劑師將更多的時間用於患者護理並提供更好的患者體驗。

We are also simplifying work for our teams and lowering costs by expanding our use of automation. We are improving patient communications through modernized tools, which is driving better patient adherence to care plans and supporting growth. We are encouraged by the momentum in our health and wellness business and believe this is an opportunity for further profitable growth over the next several years.

我們還通過擴大自動化的使用來簡化團隊的工作並降低成本。我們正在通過現代化工具改善患者溝通，從而推動患者更好地遵守護理計劃並支持增長。我們對健康和保健業務的發展勢頭感到鼓舞，並相信這是未來幾年進一步盈利增長的機會。

Our amazing associates are providing customers a full fresh and friendly experience every day. We remain committed to supporting our associates through investment in wages. And over the last 5 years, we've raised wages by 30%. We are also committed to supporting our associates development. I often say that our focus is to make Kroger a place where associates can come for a job and discover a career. Kroger has made significant investments to support this culture, and our teams have done a tremendous job creating training programs to help develop our future leaders. Our work was recently recognized with 8 awards from the Brandon Hall Group, a leading human capital management firm. We are so proud of the work you are doing to help make Kroger an employer of choice.

我們出色的員工每天都為客戶提供全新、友好的體驗。我們仍然致力於通過工資投資來支持我們的員工。過去 5 年裡，我們將工資提高了 30%。我們還致力於支持我們員工的發展。我經常說，我們的重點是讓克羅格成為員工可以來找工作並發現職業生涯的地方。克羅格進行了大量投資來支持這種文化，我們的團隊在製定培訓計劃以幫助培養未來領導者方面做了大量工作。我們的工作最近獲得了領先的人力資本管理公司 Brandon Hall Group 頒發的 8 項獎項。我們為您為幫助克羅格成為首選雇主而所做的工作感到非常自豪。

I'm inspired every day to see how our associates bring our purpose to feed the human spirit. Our Zero Hunger | Zero Waste impact plan is a vital part of how we live our purpose in the communities we serve. Upon launching the plan in 2017, Kroger committed to donate 3 billion meals by 2025. We are so excited to share that we reached this ambitious target in the first quarter of this year, more than 2 years ahead of our goal. This quarter, we announced plans to accelerate our commitment to hunger relief.

我每天都受到啟發，看到我們的員工如何實現我們的目標，滋養人類精神。我們的零飢餓|零廢物影響計劃是我們在所服務的社區實現目標的重要組成部分。 2017 年啟動該計劃後，克羅格承諾到2025 年捐贈30 億份餐食。我們很高興與大家分享，我們在今年第一季度實現了這一雄心勃勃的目標，比我們的目標提前了兩年多。本季度，我們宣布了加速消除飢餓承諾的計劃。

Upon completion of the merger with Albertsons, the combined company will donate 10 billion meals by 2030 to feed people struggling with hunger. To put that in perspective, it is enough food to feed every person in the cities of Seattle, Denver, Chicago and Boston every meal, every day for nearly 2 years. This is one of many ways that this proposed merger will benefit the communities we serve.

與 Albertsons 合併完成後，合併後的公司將在 2030 年之前捐贈 100 億份餐食，為飢餓的人們提供食物。從長遠來看，這些食物足以滿足西雅圖、丹佛、芝加哥和波士頓等城市的每個人近兩年的每一頓飯。這是擬議的合併將使我們所服務的社區受益的多種方式之一。

With that now, I will turn it over to Gary to take you through our financial results. Gary?

現在，我將把它交給加里，讓您了解我們的財務業績。加里？

Thank you, Rodney, and good morning, everyone. Kroger's second quarter results demonstrate the resiliency of our value creation model. The investments we have made over recent years to strengthen and diversify our business are enabling us to deliver consistent results despite the difficult environment. And this was very much evident when you consider the key trends we saw in our business in quarter 2. While industry-wide disinflation continues to impact food at home sales, our team is doing an excellent job managing the effects of this trend on our business.

謝謝羅德尼，大家早上好。克羅格第二季度的業績證明了我們價值創造模式的彈性。近年來，我們為加強業務並使業務多元化而進行的投資使我們能夠在困難的環境下取得一致的成果。當您考慮第二季度我們在業務中看到的主要趨勢時，這一點就非常明顯。雖然全行業的通貨緊縮繼續影響家庭食品銷售，但我們的團隊在管理這一趨勢對我們業務的影響方面做得非常出色。

Key highlights for the quarter include EPS growth despite a significant year-over-year headwind from fuel profitability and underlying operating results excluding fuel improved versus prior year due to strong gross margin management, tight cost controls and continued growth in alternative profit businesses.

本季度的主要亮點包括儘管燃料盈利能力同比出現重大阻力，但每股收益仍實現增長，並且由於強勁的毛利率管理、嚴格的成本控制和替代利潤業務的持續增長，不包括燃料在內的基本運營業績與上年相比有所改善。

I'll now provide more detail on our results this quarter. Identical sales without fuel grew 1%. Underlying growth would have been 2.6% after adjusting for the effect of the previously communicated decision to terminate our agreement with Express Scripts. Similar to the first quarter, the terminated agreement with Express Scripts had a positive effect on our FIFO gross margin generated excluding fuel and the negative effect on the OG&A rate, excluding fuel and adjustment items. The overall effect on operating profit during the second quarter was slightly positive, and we would expect this to continue to be the case for the remainder of 2023.

我現在將提供有關本季度業績的更多詳細信息。不含燃料的相同銷量增長了 1%。調整之前傳達的終止我們與 Express Scripts 協議的決定的影響後，基本增長率將為 2.6%。與第一季度類似，與 Express Scripts 的終止協議對我們的 FIFO 毛利率（不包括燃料）產生了積極影響，並對 OG&A 費率（不包括燃料和調整項目）產生了負面影響。第二季度對營業利潤的總體影響略有積極，我們預計 2023 年剩餘時間將繼續如此。

Our decision to terminate the agreement with Express Scripts reflects our commitment to making decisions that we believe are in the long-term best interest of our customers and shareholders.

我們終止與 Express Scripts 協議的決定反映了我們致力於做出我們認為符合客戶和股東長期最佳利益的決策。

Turning back now to identical sales without fuel. In the second quarter, results were at the low end of our internal expectations as we saw food-at-home inflation decelerate at a faster-than-expected pace. Inflation ended the quarter approximately 350 basis points lower than the start of the quarter. Our sales growth was underpinned by strength in our digital business, which grew 12%. Our unique combination of assets, including stores and fulfillment centers, helped us achieve growth in both pickup and delivery channels. The growth in delivery was led by a continued ramp in volumes through our CFC network and Boost membership.

現在回到不加燃料的相同銷售情況。第二季度，結果處於我們內部預期的低端，因為我們看到家庭食品通脹減速的速度快於預期。本季度末通脹率比本季度初低約 350 個基點。我們的銷售增長得益於數字業務的實力，該業務增長了 12%。我們獨特的資產組合（包括商店和配送中心）幫助我們實現了提貨和配送渠道的增長。交付量的增長得益於我們的 CFC 網絡和 Boost 會員資格的持續增長。

Gross margin was 21.8% of sales. Our FIFO gross margin rate excluding fuel increased 35 basis points compared to the same quarter last year. Our team is doing a highly effective job balancing the impact of inflation, and the improvement in rate was primarily attributable to strong Our Brands performance, lower supply chain costs, sourcing benefits and the effect of our terminated agreement with Express Scripts. These tailwinds were partially offset by higher shrink and promotional price investments. Importantly, as Rodney shared earlier, this improvement in rate was achieved while also improving our price position relative to key competitors.

毛利率佔銷售額的21.8%。與去年同期相比，我們的先進先出毛利率（不包括燃料）增加了 35 個基點。我們的團隊正在高效地平衡通貨膨脹的影響，利率的提高主要歸功於我們品牌的強勁表現、供應鏈成本的降低、採購優勢以及我們與 Express Scripts 終止協議的影響。這些有利因素被更高的收縮和促銷價格投資所部分抵消。重要的是，正如羅德尼之前分享的那樣，在實現利率提高的同時，我們相對於主要競爭對手的價格地位也得到了提高。

Supply chain efficiency is one of many components of our strategy to expand margin over time while continuing to invest in greater value for our customers. This quarter, we achieved meaningful operational efficiencies in supply chain through improved transport capacity utilization and increased productivity in our warehouses and across our network.

供應鏈效率是我們戰略的眾多組成部分之一，該戰略旨在隨著時間的推移擴大利潤，同時繼續為客戶創造更大的價值。本季度，我們通過提高運輸能力利用率以及提高倉庫和整個網絡的生產力，在供應鏈中實現了有意義的運營效率。

We continue to invest in our supply chain as we see significant opportunities to further lower costs while also improving freshness to customers by eliminating waste in our ecosystem. Shrink increased during quarter 2, primarily due to rising theft and organized retail crime. We are implementing initiatives to mitigate the financial impact including increased security and new technology solutions, but would expect shrink trends will continue to be a challenge for the remainder of the year.

我們繼續投資於我們的供應鏈，因為我們看到了進一步降低成本的重大機會，同時通過消除生態系統中的浪費來提高客戶的新鮮度。第二季度損失有所增加，主要是由於盜竊和有組織零售犯罪的增加。我們正在實施旨在減輕財務影響的舉措，包括提高安全性和新技術解決方案，但預計縮減趨勢將繼續成為今年剩餘時間的挑戰。

During the quarter, we recorded a LIFO charge of $4 million compared to a charge of $148 million for the same quarter last year. This $144 million year-over-year tailwind from LIFO partially offset the $192 million headwind we experienced in fuel operating profit during the quarter. The decrease in our LIFO charge was primarily attributable to a downwardly revised inflation outlook for the remainder of 2023.

本季度，我們記錄的 LIFO 費用為 400 萬美元，而去年同期的費用為 1.48 億美元。後進先出帶來的 1.44 億美元的同比增長部分抵消了本季度我們在燃料運營利潤方面經歷的 1.92 億美元的不利影響。我們的後進先出費用減少主要是由於下調了 2023 年剩餘時間的通脹前景。

Kroger's OG&A rate was flat excluding fuel and adjustment items, Our team continues to do an excellent job controlling costs, and after adjusting for Express Scripts, we saw underlying improvement in our OG&A rate excluding fuel and adjustment items. Our cost-saving initiatives are focused on simplification and utilizing technology to enhance the associate experience without impacting the customer.

克羅格的OG&A 費率持平（不包括燃料和調整項目），我們的團隊繼續出色地控製成本，在對Express Scripts 進行調整後，我們發現我們的OG&A 費率（不包括燃料和調整項目）有了根本性的改善。我們的成本節約計劃側重於簡化和利用技術來增強員工體驗而不影響客戶。

For example, we are improving productivity in our stores by expanding shelf-ready packaging and introducing data-driven enhancements to associate mobile devices that optimize the restocking process. We remain on track to deliver our sixth consecutive year of $1 billion in cost savings.

例如，我們通過擴大貨架包裝並引入數據驅動的增強功能來關聯移動設備來優化補貨流程，從而提高商店的生產力。我們仍有望連續第六年實現 10 億美元的成本節約。

Fuel is an important part of our overall value proposition, and our fuel rewards program continued to drive customer engagement in the second quarter. The average retail fuel price was $3.65 this quarter compared to $4.62 last quarter. And our cents per gallon fuel margin was $0.45 this quarter compared to $0.62 last year. While fuel profitability was a significant headwind compared to prior year, we were cycling historically high results from 2022 and fuel margins remain very healthy relative to historical trends.

燃料是我們整體價值主張的重要組成部分，我們的燃料獎勵計劃在第二季度繼續推動客戶參與度。本季度平均零售燃油價格為 3.65 美元，上季度為 4.62 美元。本季度每加侖燃油利潤為 0.45 美分，而去年為 0.62 美元。雖然與上一年相比，燃料盈利能力是一個重大阻力，但我們從 2022 年開始就取得了歷史最高業績，並且燃料利潤率相對於歷史趨勢仍然非常健康。

I'd now like to provide a brief update on labor relations. During the second quarter, we ratified new labor agreements with the UFCW for Dallas Clarks, Southern Illinois Clarkson Meat and Smiths Utah Clarkson Meat, covering more than 30,000 associates. In the third quarter, we have also ratified a new labor agreement with the UFCW for Fry's Food and Drugstore associates.

現在我想簡單介紹一下勞資關係的最新情況。第二季度，我們批准了與UFCW 為達拉斯克拉克(Dallas Clarks)、南伊利諾伊州克拉克森肉類(Southern Carolina Clarkson Meat) 和史密斯猶他克拉克森肉類(Smiths Utah Clarkson Meat) 簽訂的新勞工協議，覆蓋超過30,000 名員工。在第三季度，我們還批准了與 UFCW 為 Fry's Food and Drugstore 員工簽訂的新勞工協議。

Turning now to liquidity and free cash flow. Kroger continues to generate strong free cash flow through consistent operating results and working capital improvements. At the end of the second quarter, Kroger's net total debt to adjusted EBITDA ratio was a record level of 1.31. This compares to our net total debt to adjusted EBITDA target range of 2.3 to 2.5.

現在轉向流動性和自由現金流。克羅格通過持續的經營業績和營運資本改善，繼續產生強勁的自由現金流。第二季度末，克羅格的淨總債務與調整後 EBITDA 之比達到創紀錄的 1.31 水平。相比之下，我們的淨總債務與調整後 EBITDA 目標範圍為 2.3 至 2.5。

The company expects to continue to pay its quarterly dividends and expect this to increase over time, subject to Board approval. As a reminder, we have paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. We continue to be disciplined with our deployment of capital, prioritizing the highest return opportunities that support our growth strategy and TSR model. This discipline is reflected in our ROIC results, which have now improved in each of the last 3 years and is significantly above our cost of capital.

該公司預計將繼續支付季度股息，並預計在董事會批准的情況下，股息將隨著時間的推移而增加。謹此提醒，在擬議與艾伯森合併後，我們已暫停股票回購計劃，以優先考慮去槓桿化。我們繼續嚴格資本部署，優先考慮支持我們增長戰略和股東總回報率模式的最高回報機會。這一紀律反映在我們的投資回報率結果中，該結果在過去三年中每年都有所改善，並且明顯高於我們的資本成本。

This morning, Kroger announced a nationwide opioid settlement framework to settle substantially all opioid lawsuits and claims against Kroger. As a result, included in our financial results is a $1.4 billion charge related to the settlement resulting in a loss per share of $1.54 this quarter. This amount was excluded from our adjusted FIFO operating profit and our adjusted EPS results to reflect the unique and nonrecurring nature of the charge.

今天早上，克羅格宣布了一個全國性阿片類藥物和解框架，以解決針對克羅格的幾乎所有阿片類藥物訴訟和索賠。因此，我們的財務業績中包含了與和解相關的 14 億美元費用，導致本季度每股虧損 1.54 美元。該金額不包括在我們調整後的 FIFO 營業利潤和調整後的每股收益結果中，以反映該費用的獨特性和非經常性性質。

Under this settlement, Kroger has agreed to pay up to approximately $1.4 billion or $1.1 billion after tax with approximately $1.2 billion to be paid over 11 years and approximately $177 million to be paid over 6 years, each in equal installments. Initial payments will begin in December 2023 and would total approximately $140 million per year pretax for the first 6 years and approximately $110 million per year pretax for the following 5 years.

根據這項和解協議，克羅格同意支付最多約 14 億美元或稅後 11 億美元，其中約 12 億美元將在 11 年內支付，約 1.77 億美元將在 6 年內支付，每期均等分期付款。首期付款將於 2023 年 12 月開始，前 6 年每年稅前總額約為 1.4 億美元，接下來 5 年每年稅前總額約為 1.1 億美元。

This settlement is not an admission of wrongdoing or liability by Kroger, and Kroger will continue to vigorously defend against any other claims and lawsuits relating to opioids that the final agreement does not resolve. We believe that resolving these claims is in the best interest of Kroger and its customers, associates and shareholders and all of those affected by the opioid crisis. Additionally, this settlement and the payment terms will not affect Kroger's ability to complete its proposed merger with Albertsons, and we remain on track to achieve a net total debt to adjusted EBITDA ratio of 2.5 within 18 to 24 months post close.

該和解並不意味著克羅格承認不當行為或責任，克羅格將繼續積極辯護最終協議未解決的與阿片類藥物相關的任何其他索賠和訴訟。我們相信，解決這些索賠符合克羅格及其客戶、員工和股東以及所有受阿片類藥物危機影響的人的最佳利益。此外，這項和解和付款條款不會影響克羅格完成其與 Albertsons 擬議合併的能力，並且我們仍有望在交易結束後 18 至 24 個月內實現淨總債務與調整後 EBITDA 之比 2.5。

In closing, I'd like to provide additional color on our outlook for the remainder of the year. As I shared earlier, this inflation is occurring at a greater rate in 2023 than we originally anticipated and our customers are continuing to feel the effects of macroeconomic conditions. For these reasons, we believe the remainder of the year will continue to present challenges to navigate, and we expect identical sales without fuel will now be at the low end of our full year guidance range of 1% to 2%.

最後，我想對我們今年剩餘時間的展望提供更多的見解。正如我之前分享的，2023 年通脹率將高於我們最初的預期，我們的客戶將繼續感受到宏觀經濟狀況的影響。出於這些原因，我們認為今年剩餘時間將繼續面臨挑戰，並且我們預計不含燃料的相同銷售額現在將處於我們全年指導範圍 1% 至 2% 的低端。

We would expect identical sales without fuel to be slightly negative in the second half of the year. As a reminder, this guidance reflects the effect of Express Scripts, which is reducing our reported identical sales without fuel by approximately 150 basis points in 2023.

我們預計下半年不含燃料的相同銷量將略有下降。提醒一下，本指引反映了 Express Scripts 的影響，該公司將我們報告的 2023 年不含燃料的相同銷售額減少約 150 個基點。

Despite slowing sales, as demonstrated in our year-to-date results, we believe we have the flexibility within our model to navigate the impact of this environment through effective cost management and growing alternative profits.

儘管銷售放緩，正如我們今年迄今的業績所證明的那樣，我們相信我們的模型具有靈活性，可以通過有效的成本管理和增加替代利潤來應對這種環境的影響。

We are maintaining our adjusted net earnings per diluted share and adjusted net operating profit guidance and would expect adjusted EPS to be in line with the prior year in the third quarter and slightly ahead of the prior year in the fourth quarter before including the approximately $0.15 benefit at the 53rd week.

我們維持調整後每股攤薄淨利潤和調整後淨利潤指引，預計第三季度調整後每股收益將與上年同期持平，第四季度略高於上年同期（未計入約0.15 美元的收益）在第53週時。

Kroger delivered another quarter of consistent results built on the foundation of record growth over the past 3 years. While macro uncertainties remain, we are confident the strength and resiliency of our value creation model will allow us to continue to deliver attractive and sustainable total shareholder returns. And now I'll turn it back to Rodney.

克羅格在過去三年創紀錄的增長基礎上又實現了一個季度的穩定業績。儘管宏觀不確定性依然存在，但我們相信，我們價值創造模式的實力和彈性將使我們能夠繼續提供有吸引力且可持續的股東總回報。現在我將把它轉回給羅德尼。

Thank you, Gary. Before we open up the floor to your questions, let me provide a brief update on our pending merger with Albertsons Companies. This morning, Kroger and Albertsons Companies announced that they've entered into a definitive agreement with C&S Wholesale Grocers for the sale of 413 stores as well as banners, distribution centers, offices and private label brands in connection with our proposed merger. When we announced plans to merge with Albertsons last year, we committed to delivering a divestiture plan that would ensure the stores will remain open, frontline associates will remain employed and existing collected bargaining agreements will continue.

謝謝你，加里。在我們開始回答大家的問題之前，讓我簡要介紹一下我們與艾伯森公司即將進行的合併的最新情況。今天早上，Kroger 和 Albertsons Companies 宣布，他們已與 C&S Wholesale Grocers 達成最終協議，出售與我們擬議的合併相關的 413 家商店以及橫幅、配送中心、辦公室和自有品牌。當我們去年宣布與艾伯森合併的計劃時，我們承諾實施一項剝離計劃，以確保商店繼續營業，一線員工繼續受僱，現有的討價還價協議將繼續下去。

A critical component of that plan was to identify a well-qualified buyer who would be able to operate as a fierce competitor. Since then, we've conducted a robust and thoughtful diligence process and reviewed dozens of buyers spanning from private to public to union to nonunion, domestic and international players.

該計劃的一個關鍵組成部分是確定一個合格的買家，能夠作為強有力的競爭對手進行運營。從那時起，我們進行了嚴格而周到的盡職調查，審查了數十家買家，涵蓋從私人到公共、從工會到非工會、國內和國際參與者。

We are very proud today to announce the conclusion of that process, which has led us to C&S Wholesale Grocers, a well-qualified buyer that meets all the criteria necessary to complete our transaction. C&S is one of the largest private companies in America today and an industry leader in wholesale grocery supply and supply chain solutions with a strong track record as a successful grocery operator retailer.

今天，我們非常自豪地宣布該流程已結束，最終我們找到了 C&S Wholesale Grocers，這是一家合格的買家，符合完成我們交易所需的所有標準。 C&S 是當今美國最大的私營公司之一，也是批發雜貨供應和供應鏈解決方案的行業領導者，擁有作為成功的雜貨運營零售商的良好記錄。

Operating for over 100 years, C&S' retail footprint includes more than 160 stores and the company services customers of all sizes, supplying more than 100,000 products to more than 7,500 independent supermarkets, retail chain stores and military bases. C&S service offerings include a full suite of retail service offerings, very similar to what Kroger provides in house including merchandising, e-commerce, accounting and store design, for example.

C&S 經營超過 100 年，其零售足跡包括 160 多家商店，該公司為各種規模的客戶提供服務，為 7,500 多家獨立超市、零售連鎖店和軍事基地供應超過 100,000 種產品。 C&S 服務產品包括全套零售服務產品，與克羅格內部提供的服務非常相似，包括商品推銷、電子商務、會計和商店設計等。

The company is deeply invested in the communities where it operates. And this retail expansion will continue their long-standing mission to help feed communities. C&S is led by an experienced management team with the financial strength to complete this transaction and also invest in the business for future growth. The company's comprehensive operational infrastructure and purchasing efficiency positions them to successfully operate in today's competitive environment. The divestiture plan ensures no stores will close as a result of the merger and that all frontline associates will remain employed.

該公司對其運營所在社區進行了深入投資。此次零售擴張將繼續其長期使命，幫助養活社區。 C&S 由經驗豐富的管理團隊領導，擁有完成此次交易的財務實力，並投資於該業務以實現未來的增長。該公司全面的運營基礎設施和採購效率使他們能夠在當今競爭激烈的環境中成功運營。剝離計劃確保不會有任何商店因合併而關閉，並且所有一線員工都將繼續受僱。

C&S is also committed to honoring all collective bargaining agreements, which include industry-leading benefits and further investing for growth. Importantly, the company also brings experience with the merger process having been an FTC-approved divestiture buyer in prior grocery transactions with a strong record of successfully integrating union employees and collective bargaining agreements.

C&S 還致力於遵守所有集體談判協議，其中包括行業領先的福利和進一步投資以促進增長。重要的是，該公司還帶來了合併過程的經驗，在之前的雜貨交易中曾是聯邦貿易委員會批准的剝離買家，並在成功整合工會員工和集體談判協議方面擁有良好的記錄。

To help support the immediate and long-term success of the divested business, the divestiture plan includes more than just a collection of stores but also a robust operational infrastructure. Included in the sale are centrally located distribution facilities, regional headquarters, and strong teams with deep industry expertise.

為了幫助支持被剝離業務的近期和長期成功，剝離計劃不僅包括一系列商店，還包括強大的運營基礎設施。此次出售的內容包括位於中心的分銷設施、地區總部以及擁有深厚行業專業知識的強大團隊。

In terms of consideration, the financial terms of this divestiture plan are in line with what we expected and allow us to reaffirm the compelling shareholder value creation opportunity this transaction creates. With the announcement today, we are confident that our plans fulfill all the commitments we set out in the original merger agreement.

就考慮而言，該剝離計劃的財務條款符合我們的預期，並使我們能夠重申該交易所創造的令人信服的股東價值創造機會。通過今天的宣布，我們相信我們的計劃能夠履行我們在原始合併協議中規定的所有承諾。

Our proposed merger with Albertsons creates meaningful and measurable benefits for America's consumers, Kroger and Albertsons associates and communities that both Albertsons and Kroger serve. This key step keeps us on track to close our proposed merger with Albertsons in early 2024. We encourage you to review the corresponding press release from this morning for further details.

我們提議的與艾伯森的合併將為美國消費者、克羅格和艾伯森的員工以及艾伯森和克羅格所服務的社區創造有意義和可衡量的利益。這一關鍵步驟使我們有望在 2024 年初完成與 Albertsons 的擬議合併。我們鼓勵您查看今天上午的相應新聞稿，了解更多詳細信息。

In terms of integration planning, we are progressing well, and it's been exciting to see the talent from both the Kroger and Albertsons teams work together to plan on how the combined company will deliver an even stronger omnichannel food retail experience post close. We are incredibly excited about the future together with Albertsons.

在整合規劃方面，我們進展順利，很高興看到克羅格和艾伯森團隊的人才共同努力規劃合併後的公司如何在交易完成後提供更強大的全渠道食品零售體驗。我們對與艾伯森一起的未來感到非常興奮。

As a reminder, given the breadth of information shared in today's call, our divestiture announcement earlier this morning, we will extend our Q&A session if needed to ensure we cover a broad range of topics. With that, Gary and I look forward to your questions.

提醒一下，考慮到今天的電話會議中分享的信息廣泛，我們今天早上早些時候宣布了剝離，如果需要，我們將延長問答時間，以確保我們涵蓋廣泛的主題。因此，加里和我期待您的提問。

(Operator Instructions) Our first question is from Simeon Gutman from Morgan Stanley.

（操作員說明）我們的第一個問題來自摩根士丹利的 Simeon Gutman。

I'm going to ask one and a follow-up in case my phone gets cut off. My first is on disinflation. Wanted to talk about more specifically if there's a chance we get to deflation around the corner in '24 and then how it's changing how you run the business, whether it's pricing, and if you're seeing elasticity. And then a follow-up, a separate question. Was the review process for the merger waiting to begin until this divestiture was announced? Or has the FTC's process been ongoing, and that allows you to close on time?

如果我的電話被切斷，我會詢問一個和後續的問題。我的第一個問題是通貨緊縮。我想更具體地談談我們是否有可能在 24 年即將到來的通貨緊縮，以及它如何改變你經營業務的方式，是否是定價，以及你是否看到彈性。然後是一個後續問題，一個單獨的問題。合併審查程序是否要等到剝離宣布後才開始？或者 FTC 的流程是否仍在進行中，從而可以讓您按時結束？

Thanks, Simeon. On the merger, there's been ongoing discussions with the FTC and the related teams throughout the process. And once we announce it this morning, we will share this information with the FTC and continue that active engagement and dialogue. So it's -- along the way, there's been ongoing conversations and there'll be continuing ongoing conversations, but now we have more specifics in terms of the next steps that we'll be able to share. On disinflation, I'll start and let Gary finish on it. If you look -- one of the things that Gary reminded me of is if you look in the last 50 years, I think we've had -- or 40 years, I don't remember which one that we had 2 years of deflation when you look at over the last several lifetime almost. One of the things about the Kroger model is that we've found and we're able to be successful operating in any environment both from a competitive standpoint and from an inflation standpoint. And we would expect it to be no different.

謝謝，西蒙。關於合併，整個過程中一直與 FTC 和相關團隊進行討論。一旦我們今天早上宣布這一消息，我們將與聯邦貿易委員會分享這一信息，並繼續積極參與和對話。所以，一路走來，我們一直在進行對話，並且將會繼續進行對話，但現在我們對於下一步的步驟有了更多的細節，我們可以分享。關於通貨緊縮，我將開始並讓加里完成。如果你看看——加里讓我想起的一件事是，如果你看看過去 50 年，我想我們已經經歷過——或者 40 年，我不記得我們經歷了 2 年的通縮當你看過去幾輩子差不多的時候。關於克羅格模型的一件事是，我們發現，無論從競爭的角度還是從通貨膨脹的角度來看，我們都能夠在任何環境中成功運營。我們希望它不會有什麼不同。

We are beginning to see some volume improvements as inflation has slowed. We believe that there would continue to be a lag there. We're also finding CPGs, in many cases, are partnering in more aggressive ways on helping us move tonnage as well. With that, Gary, I'll let you finish for the -- any additional comments you want to make?

隨著通脹放緩，我們開始看到成交量有所改善。我們認為，這方面仍將存在滯後。我們還發現，在許多情況下，快速消費品公司也以更積極的方式進行合作，幫助我們轉移噸位。加里，我就讓你講完——你還有什麼意見嗎？

Yes. Thanks, Rodney. I think you covered it well. All I would say, Simeon, maybe is relative to our expectations. You may recall at the beginning of the year, we shared that we thought inflation might end in the year in sort of the 3% to 4% range. And certainly, as we've seen, trends continue to evolve throughout the year.

是的。謝謝，羅德尼。我認為你覆蓋得很好。西蒙，我想說的一切可能與我們的期望有關。您可能還記得，在今年年初，我們曾表示，我們認為今年通脹率可能會在 3% 至 4% 的範圍內。當然，正如我們所看到的，趨勢全年都在不斷變化。

As I mentioned in my prepared remarks, we would now expect it to be at a lower level than that, which is partly why we've guided to the low end of our sales range for the year. So we would expect inflation now to be in the low single digits, the 1% to 2% range would be our sort of base assumption for the end of the year. And we believe, as Rodney said, that certainly there's always a risk that the scenarios can turn out differently. And we'll continue to adapt our model if we needed to reflect that. But our base assumption would be that we'd expect to sort of return to more normalized very low single digit food inflation which, of course, is what our long-term model is based upon of that sort of 1% to 1.5% inflation rate.

正如我在準備好的發言中提到的，我們現在預計其水平將低於該水平，這就是我們將今年銷售範圍設定為低端的部分原因。因此，我們預計目前通脹率將處於較低的個位數，1% 至 2% 的範圍將是我們對年底的基本假設。正如羅德尼所說，我們相信，情況肯定會出現不同的風險。如果我們需要反映這一點，我們將繼續調整我們的模型。但我們的基本假設是，我們預計食品通脹將回歸到更加正常化的非常低的個位數，當然，這也是我們的長期模型所基於的 1% 至 1.5% 通脹率。

Our next question is from Krisztina Katai from Deutsche Bank.

我們的下一個問題來自德意志銀行的 Krisztina Katai。

I have a strategic question regarding the Albertsons merger. So I guess, historically M&A hasn't added that much value. We look at the businesses now. Margins have remained higher post-COVID, but I think there's a natural question that as ID sales slow, maybe there will be a greater reinvestment needed into the business. So I'd be curious to get your views on the level of reinvestment versus your targeted synergies and if anything has changed regarding your approach versus the October view.

我有一個關於艾伯森合併的戰略問題。所以我想，從歷史上看，併購並沒有增加那麼多價值。我們現在看看這些企業。新冠疫情過後，利潤率仍然較高，但我認為，一個自然的問題是，隨著 ID 銷售放緩，該業務可能需要更多的再投資。因此，我很想了解您對再投資水平與目標協同效應的看法，以及您的方法與 10 月份的觀點相比是否有任何變化。

Yes. If you look at the view today versus October, I would say the biggest positive is I've been incredibly impressed with the talent of the Albertsons team. It doesn't surprise me, but actually getting to know people and working with them and the excitement that there is for the merged company together.

是的。如果你看看今天和十月份的情況，我會說最大的積極因素是艾伯森團隊的才華給我留下了難以置信的印象。這並不令我感到驚訝，而是真正了解人們並與他們一起工作，以及合併後的公司在一起所帶來的興奮。

If you look at it from a shareholder standpoint, we would feel very comfortable with what things we shared in October of last year in terms of we would expect from a cash flow perspective that it would be 30% accretive by year 4, that the targeted net-to-EBITDA ratio that will maintain investment grade and be within those ranges within 18 to 24 months.

如果你從股東的角度來看，我們會對去年 10 月分享的內容感到非常滿意，因為我們預計從現金流的角度來看，到第 4 年將增長 30%，目標是淨額與EBITDA 比率將在18 至24 個月內維持投資級別並處於這些範圍內。

If you look at the synergies, we still are comfortable with $1 billion. Obviously, we're going to work really hard to make sure and identify savings beyond that. And we've also committed -- and remember that those are net of investing in our associates and investing for the customer to lower prices.

如果你看看協同效應，我們對 10 億美元仍然感到滿意。顯然，我們將非常努力地確保並確定除此之外的節省。我們還做出了承諾——請記住，這些都是不包括對我們的員工進行投資以及為客戶進行降低價格的投資。

And that's always been part of the plan from day 1 and would expect to. So when you look at overall, we still remain confident in terms of the commitments that we outlined in October. And at this point, we just want to get started and start benefiting our associates, benefiting the customers and benefiting the communities.

從第一天起，這一直是計劃的一部分，並且預計會如此。因此，從整體來看，我們對 10 月份做出的承諾仍然充滿信心。此時此刻，我們只想開始讓我們的員工、客戶和社區受益。

Yes. Maybe, Rodney, just a couple of things to add, if I can. I would completely agree with your comments. And we -- obviously, we've had almost a year now since the announcement. And so while there's only certain conversations you can have as Kroger and Albertsons is talking about planning for the merger I would say we've only gained more confidence in the synergy expectations that we've had.

是的。羅德尼，如果可以的話，也許我要補充幾件事。我完全同意你的意見。顯然，自宣布這一消息以來，我們已經過去了將近一年的時間。因此，雖然當克羅格和艾伯森正在談論合併計劃時，您只能進行某些對話，但我想說的是，我們只是對我們所擁有的協同效應期望更有信心了。

So we have been able to continue to validate the assumptions that Rodney outlined a moment ago. I think the only other thing that I would mention is way back to when we announced the merger, we talked about this wasn't just about synergies. It was about essentially fueling the flywheel of the new combined company.

因此，我們能夠繼續驗證羅德尼剛才概述的假設。我想我要提到的唯一另一件事是早在我們宣布合併時，我們談論的不僅僅是協同效應。這實質上是為新合併公司的飛輪提供動力。

And if you think about the results we've announced so far this year, the strength in our results in growing digital sales in our digital ecosystem, the strength in Our Brands performance, the growth in alternative profit streams, there the sort of the future value creation model for the company. And I think the combination of Albertsons and Kroger to combine really creating opportunities to significantly accelerate that flywheel effect across those elements of the model that we see is working very well now, and we think can work even better in the future when we combine the 2 companies.

如果您考慮一下我們今年迄今為止宣布的業績，我們在數字生態系統中數字銷售增長的業績實力，我們品牌業績的實力，替代利潤流的增長，那就是未來的樣子為公司創造價值的模式。我認為艾伯森和克羅格的結合確實創造了機會，可以顯著加速我們所看到的模型中這些元素的飛輪效應，現在效果很好，我們認為當我們將這兩個結合起來時，將來可以做得更好公司。

And just a quick follow-up. The sales transaction with C&S this morning acquiring 413 stores, what is the confidence level in that number? And I think there was a comment that they would be willing to buy up to 650. Can you just maybe talk about the likelihood that it could potentially be that high versus the 413 in today's release?

只是快速跟進。今天早上與 C&S 的銷售交易收購了 413 家商店，這個數字的置信度是多少？我認為有評論稱他們願意購買最多 650 個。您能否談談與今天發布的 413 相比，它可能有那麼高的可能性？

Sure. Yes, thanks for the question. So we feel very good about the plan. We think the plan is very well thought through. As Rodney shared in prepared comments, we spent almost 10 months now really working with different potential buyers and pulling together both the plan around how we make sure we find the right buyer that will be able to continue to grow those stores successfully in the future and putting an overall structure around the plan with the number of stores that provide that right concentration for a successful model going forward and providing all the infrastructure to support it.

當然。是的，謝謝你的提問。所以我們對這個計劃感覺非常好。我們認為該計劃經過深思熟慮。正如羅德尼在準備好的評論中所分享的那樣，我們花了近10 個月的時間與不同的潛在買家真正合作，並圍繞如何確保我們找到合適的買家來製定計劃，以便能夠在未來繼續成功地發展這些商店，以及圍繞該計劃制定總體結構，其中包括商店數量，為未來的成功模式提供適當的集中度，並提供所有基礎設施來支持它。

So we feel very good about the plan we've announced. We did include in the agreement, as you mentioned, you may recall when we announced the deal originally that our agreement with Albertsons has a sort of a break point, if you like, of where Kroger would have the option to not move forward with the transaction if we reach 650 stores as potential divestitures. So what you saw in the announcement today was that we essentially wanted to make sure we align the agreements between Albertsons and C&S and ourselves to make sure that there is a commitment there to be able to flex up if that was something that was needed. But we feel very good about the plan that we announced today.

所以我們對我們宣布的計劃感覺非常好。正如您所提到的，我們確實在協議中包含了這一點，您可能還記得，當我們最初宣布該交易時，我們與艾伯森的協議有一個斷點，如果您願意的話，克羅格可以選擇不繼續推進該交易。如果我們達到 650 家商店作為潛在的資產剝離，我們將進行交易。所以你在今天的公告中看到的是，我們本質上是希望確保我們與Albertsons 和C&S 之間的協議以及我們自己之間的協議保持一致，以確保有一個承諾，如果需要的話，能夠靈活地進行調整。但我們對今天宣布的計劃感覺非常好。

And the announcement today also, no more work will be done in terms of the SpinCo. That's not something that's part of the solution going forward.

今天還宣布，將不再進行分拆公司方面的任何工作。這不是未來解決方案的一部分。

Our next question comes from Michael Lasser from UBS.

我們的下一個問題來自瑞銀集團的邁克爾·拉塞爾。

Given the announcement with C&S today and the flexibility that it offers to divest the number of stores that would be consistent with your agreement with Albertsons, what other basis or push back could the regulators have to blessing this merger? And what actions or steps are you taking today to potentially address those potential concerns?

鑑於今天與 C&S 的公告，以及它提供的剝離門店數量的靈活性，這與您與 Albertsons 的協議一致，監管機構還有什麼其他依據或阻力可以支持這次合併？您今天正在採取哪些行動或步驟來解決這些潛在問題？

Michael, it's a great question. And obviously, we feel incredibly excited about C&S and what they bring to the table, and they'll be an incredibly fierce competitor. So if you look at the commitments that we made in October last year when we announced the transaction and if you look at selling the stores to C&S, we've been able to check off every one of those boxes. And we're also including 7 distribution centers, 2 regional offices, 5 private label brands in addition to the store.

邁克爾，這是一個很好的問題。顯然，我們對 C&S 及其帶來的成果感到非常興奮，他們將成為一個非常激烈的競爭對手。因此，如果你看看我們去年 10 月宣布交易時做出的承諾，如果你看看將商店出售給 C&S，我們已經能夠勾選每一項。除商店外，我們還包括 7 個配送中心、2 個區域辦事處、5 個自有品牌。

So this is going to be an amazing great business for C&S that we'll be able to operate and grow from an incredible base with incredible talented people. So for us, we think we've addressed all the things and questions the FTC would have. We also were able to accomplish all the commitments we made in October of last year and found a buyer that would recognize the labor contracts as well. So we feel like all those things that you would have a checkoff list, we've met all of those and exceeded it as well. I don't know, Gary, anything you want to add to that because you and Christine did majority of the work.

因此，對於 C&S 來說，這將是一項令人驚嘆的偉大業務，我們將能夠在令人難以置信的基礎上與令人難以置信的人才一起運營和發展。因此，對於我們來說，我們認為我們已經解決了聯邦貿易委員會可能提出的所有問題和問題。我們也完成了去年10月做出的所有承諾，找到了也承認勞動合同的買家。因此，我們覺得您需要核對清單上的所有事情，我們都滿足並超越了它們。加里，我不知道你想添加什麼，因為你和克里斯汀做了大部分工作。

No, I think you said it well, Rodney. I mean this has been very well thought through. We've had great advisers that helped us on the journey, and we're excited now to talk to the FTC about the plan.

不，我認為你說得很好，羅德尼。我的意思是，這已經經過深思熟慮。我們有優秀的顧問在這一過程中為我們提供了幫助，現在我們很高興與聯邦貿易委員會討論該計劃。

(inaudible) your an annual growth rate -- I'm here. Can you hear me? Can you hear me, Rodney?

（聽不清）你的年增長率——我在這裡。你能聽到我嗎？你能聽到我說話嗎，羅德尼？

Yes. You cut out. So if you were asking a question -- we can hear you now, but you were cutting off so we couldn't hear what you said.

是的。你刪掉了。因此，如果您在問問題，我們現在可以聽到您的聲音，但您正在切斷電源，因此我們聽不到您所說的內容。

All right. Sorry about that. Sorry. My question is, if we look at your guidance, for IDs for the back half of the year, which imply slightly negative IDs, is that would translate to 4-year geometric stacks that are relatively consistent with what you experienced in the second quarter despite what is likely to be less of an inflation benefit in the third and the fourth quarter? So inherently, either your volume is going to have to pick up or your market share is going to need to improve, presumably both.

好的。對於那個很抱歉。對不起。我的問題是，如果我們看看您的指導，對於今年下半年的ID（這意味著ID 略有負數），這將轉化為4 年幾何堆棧，與您在第二季度經歷的情況相對一致，儘管第三季度和第四季度的通脹收益可能會更少嗎？因此，從本質上講，要么你的銷量必須增加，要么你的市場份額需要提高，大概兩者都是。

So a, to what degree are you going to need to see an improvement in volumes in order for you to achieve the implied guidance? And b, how hard and how -- to what degree are you going to need to push the other parts of your P&L? How much price investment are you going to need to make in order to drive that volume improvement in those share gains?

那麼，為了實現隱含的指導，您需要看到數量的改善到什麼程度？ b，您需要將損益表的其他部分推到什麼程度，以及如何努力？為了推動這些股票收益的數量改善，您需要進行多少價格投資？

Michael, thanks for the question. I think as we mentioned in the prepared comments, we do expect inflation to continue to decelerate. But we are sort of coming through, we think, the largest part of that deceleration. If you look at the number that I mentioned for Q2, it's down 3.5% from the start of the quarter to the end of the quarter, And then my comment about we're expecting to be between the 1% and 2% by the end of the year, we would expect there to be a slowdown in the deceleration rate in inflation impacting our results.

邁克爾，謝謝你的提問。我認為正如我們在準備好的評論中提到的，我們確實預計通脹將繼續減速。但我們認為，我們正在經歷減速的最大部分。如果你看一下我提到的第二季度的數字，從季度初到季度末下降了 3.5%，然後我的評論是我們預計到年底會下降 1% 到 2% 之間今年，我們預計通脹減速率將會放緩，從而影響我們的業績。

And then as you mentioned, if you look at our second quarter results, we saw a sort of a slight decline from being maybe slightly above the 1% that we achieved in Q2 in the first period to being slightly positive in the final period of the quarter.

And then as you mentioned, if you look at our second quarter results, we saw a sort of a slight decline from being maybe slightly above the 1% that we achieved in Q2 in the first period to being slightly positive in the final period of the四分之一.

And I share that because the slowdown in growth in sales would have been less than the inflation decline, which is really pointing to your point that we are seeing an improvement in unit trends. And we expect that to continue by leaning into some of the things that are working really well for us around growing households, driving digital sales and then also continuing to execute our plan of delivering more promotions for customers and continuing to execute on the strategy to support that lower-income customer and a budget around accelerating Smart Way, private label products and continuing to deliver those merchandising strategies that connect with that customer in the store as well.

我同意這一點是因為銷售增長的放緩幅度小於通貨膨脹的下降幅度，這確實表明了您的觀點，即我們看到單位趨勢有所改善。我們希望繼續致力於一些對我們來說非常有效的事情，圍繞不斷增長的家庭，推動數字銷售，然後繼續執行我們為客戶提供更多促銷活動的計劃，並繼續執行支持戰略低收入客戶和圍繞加速Smart Way、自有品牌產品的預算，以及繼續提供與商店中的客戶建立聯繫的銷售策略。

Our next question comes from John Heinbockel from Guggenheim Partners.

我們的下一個問題來自古根海姆合夥人公司的約翰·海因博克爾。

So if we think about the old algo on comp, right, which is higher than where we are now, I'm curious, do you think 1% to 2% inflation, as we normalize to that, does that support, right, the algo that you had historically on comp? Or is math and some of the other headwinds, right, work against that? And then I think you said you saw improvement in budget-conscious comps which were negative, I think, 2% last quarter. So is that still negative? And are the higher income households still performing as they did before?

因此，如果我們考慮一下關於比較的舊算法，對吧，它比我們現在的水平要高，我很好奇，你認為1% 到2% 的通脹率，正如我們標準化的那樣，是否支持，對吧，你曾經在comp上使用過的算法？或者數學和其他一些逆風是否會對此產生不利影響？然後我想你說過你看到了注重預算的比較的改善，我認為上個季度是負值 2%。那麼這仍然是負面的嗎？高收入家庭的表現是否仍像以前一樣？

I'll start and let Gary talk about the longer-term stuff. But if you look at the higher income household, that growth continues. That customer is meaningfully more profitable because of buying a lot more fresh product and buying bigger-sized products and things. If you look at the budget-conscious shopper, the trends have improved but they would still be negative, but the trends have improved. In terms of relative to the long-term TSR model, Gary, I'll let you...

我將首先讓加里談談長期的事情。但如果你看看高收入家庭，這種增長仍在繼續。由於購買了更多的新鮮產品和更大尺寸的產品和物品，該客戶的利潤明顯更高。如果你觀察一下精打細算的購物者，趨勢有所改善，但仍然是負面的，但趨勢已經改善。就相對於長期 TSR 模型而言，Gary，我會讓你......

Sure. and John, I think your question maybe was leaving a little bit between the second half of the year and the long-term plan as well. So I would definitely think about it in those 2 buckets. I wouldn't say that we're changing our long-term growth algorithm view that we believe food-at-home will continue to grow in that sort of 2% to 3% a year over the long term and we will expect to grow top line between 2% and 4% and deliver earnings growth of 3% to 5% by both achieving growth in line with slightly ahead of the market and also continuing to expand margin through the different levers that we talked about during our various Investor Days.

當然。約翰，我認為你的問題可能是在下半年和長期計劃之間留下了一點距離。所以我肯定會在這兩個方面考慮它。我不會說我們正在改變我們的長期增長算法觀點，即我們相信，從長遠來看，家庭食品將繼續以每年 2% 至 3% 的速度增長，並且我們預計會增長通過實現略微領先於市場的增長，並通過我們在各個投資者日討論的不同槓桿繼續擴大利潤率，實現2% 至4% 的營收增長，並實現3% 至5% 的盈利增長。

I think in the short term, when we think about the rest of the year, I would use the first half as a sort of decent sense of how we're thinking about the rest of the year. We would expect to continue to see some tailwinds in our gross margin rate around some of the areas that I mentioned in the prepared remarks on supply chain and Our Brands, sourcing benefits, et cetera. OG&A will continue to manage costs very closely given that the environment is, to your point, lower in terms of the headline growth rate than we would be expecting in our long term models. So we'll be managing costs accordingly. And obviously, we do continue to flex our model to make sure that we're adjusting our plans when we have those short-term adjustments to what we see in the upcoming environment.

我認為，從短期來看，當我們考慮今年剩餘時間時，我會利用上半年作為我們如何思考今年剩餘時間的一種不錯的感覺。我們預計，圍繞我在供應鍊和我們的品牌、採購優勢等準備好的評論中提到的一些領域，我們的毛利率將繼續出現一些順風車。 OG&A 將繼續密切管理成本，因為就您而言，總體增長率低於我們在長期模型中的預期。因此，我們將相應地管理成本。顯然，我們確實會繼續調整我們的模型，以確保當我們對即將到來的環境進行短期調整時，我們會調整我們的計劃。

And then maybe as a quick follow-up. What is the update now on the Ocado process in terms of rollout and adoption? I mean, we've talked about it a bit and movement toward your profitability objective. Where are we on all of that relative to -- and you talked about pickup?

然後也許作為快速跟進。 Ocado 流程在推出和採用方面有何更新？我的意思是，我們已經討論過它以及實現盈利目標的進展。相對於您談到的提貨問題，我們目前處於什麼階段？

Yes. If you look at the sheds, continued great progress on the growth in the sheds and the base operating model. Right now, all the energy is focused on the ones we have and making sure that those are where we want them to be, where they need to be and on a sustainable basis. The other thing that I think is incredibly important is if you look at the repurchase rate once somebody starts using the shed and the NPS scores, they remain very high. So I would say that a ton of work is being done. We're making progress, but we wouldn't be to the point where we would start focusing on additional sheds until we make sure that we have a clear path on the ones we have, and we are making meaningful progress but we still have a lot of work to do.

是的。如果你看看棚屋，就會發現棚屋的增長和基地運營模式持續取得巨大進展。目前，所有的精力都集中在我們擁有的資源上，並確保它們處於我們想要的位置、需要的位置並且可持續。我認為非常重要的另一件事是，如果你看看有人開始使用棚屋後的回購率和 NPS 分數，它們仍然非常高。所以我想說，我們正在做大量的工作。我們正在取得進展，但我們不會開始關注更多的棚屋，直到我們確保我們在已有的棚屋上有一條清晰的道路，並且我們正在取得有意義的進展，但我們仍然有一個有很多工作要做。

Our next question is from Michael Montani from Evercore ISI.

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

Just wanted to ask about ESI. So one question earlier was related to market share and why that might improve towards the end of the year, thinking that could be part of it. But I wanted to ask at a high level, would you be comfortable kind of going it alone if you can't seem to find a good partner? And then what could some of the longer-term benefits be to the business model, if that is the case?

只是想問一下ESI。因此，早些時候的一個問題與市場份額有關，以及為什麼市場份額可能會在年底前有所改善，認為這可能是其中的一部分。但我想問一個高層次的問題，如果你似乎找不到一個好的合作夥伴，你會覺得單幹嗎？如果是這樣的話，商業模式的長期利益會是什麼？

Yes. On ESI, first of all, I am incredibly proud of our pharmacy teams. They've done an amazing job on being able to retain a meaningful part of those customers, and it's a combination of doing direct contracting with some companies and also leveraging our discount card for patients. So -- when you look at overall, I think they've done an incredible job on minimizing the effect.

是的。對於 ESI，首先，我為我們的藥房團隊感到無比自豪。他們在保留這些客戶中有意義的一部分方面做得非常出色，這是與一些公司直接簽訂合同以及利用我們為患者提供的折扣卡的結合。所以，當你從整體上看時，我認為他們在最小化影響方面做了令人難以置信的工作。

Now with that said, it's still over -- about 1.5%, or I think this quarter, I think we shared 1.6%. We're very comfortable with where we are but we're always focused on trying to make sure we're taking care of the customers and taking care of patients. But we have to be able to do that in a way where we don't lose money on every prescription filled. So that's really what the focus is on, and we feel very comfortable with where we are. Gary, anything you want to add to that?

話雖如此，它仍然結束了——大約 1.5%，或者我認為這個季度，我認為我們分享了 1.6%。我們對自己的現狀感到非常滿意，但我們始終致力於確保我們照顧好客戶和患者。但我們必須能夠以一種不會在每次開處方時都賠錢的方式做到這一點。所以這才是真正的重點，我們對目前的處境感到非常滿意。加里，你還有什麼要補充的嗎？

No, I think it's all good, thanks.

不，我認為一切都很好，謝謝。

Just wanted to follow up, if I could, quickly on the potential multiple implied by the transaction for the divested stores, have had some pushback. It seems to be around 2 to 2.5x, which was a little less than we thought. So I didn't know if you could discuss that potentially in the context of the ability to increase the stores divested if needed to close the deal vis-a-vis what the potential profitability might be of those locations.

如果可以的話，我只是想快速跟進剝離商店交易所暗示的潛在倍數，但遇到了一些阻力。看起來大約是 2 到 2.5 倍，比我們想像的要少一些。因此，我不知道您是否可以在需要完成交易時增加剝離的商店的能力以及這些地點的潛在盈利能力的背景下討論這一問題。

Yes. Thanks for the question. I think maybe the confusion could be around the multiple and what we were assuming because the -- I think the only previous information that we've shared was relative to SpinCo, which was potentially a solution for a part of the overall divestiture plan. It wouldn't have been actually a solution for all geographies, but that was the 100 stores to 375 stores that were contemplated in the SpinCo structure. And we mentioned or shared in that agreement that the multiple could be 3x fall on EBITDA. So this multiple would be a little bit below that number.

是的。謝謝你的提問。我認為困惑可能在於倍數和我們的假設，因為我認為我們之前分享的唯一信息與分拆公司有關，這可能是整體剝離計劃的一部分的解決方案。實際上，這並不是一個適合所有地區的解決方案，但這就是 SpinCo 結構中考慮的 100 家到 375 家商店的情況。我們在該協議中提到或分享，EBITDA 的倍數可能是 3 倍。所以這個倍數會略低於這個數字。

But that being said, as Rodney mentioned in the prepared comments, we haven't actually assumed in our modeling that the transaction would move forward with a different number than we actually announced today. And in actual fact, the number would be very much in line with what we were contemplating. We believe it's a good solution for our shareholders because, as Rodney mentioned, it actually solves for all the elements that are important to a divestiture plan.

但話雖這麼說，正如羅德尼在準備好的評論中提到的那樣，我們在模型中實際上並沒有假設交易將以與我們今天實際宣布的不同的數字進行。事實上，這個數字非常符合我們的預期。我們相信這對我們的股東來說是一個很好的解決方案，因為正如羅德尼提到的，它實際上解決了對剝離計劃重要的所有要素。

It will help us longer term in being able to simplify a transition services, to be able to manage the new combined company more effectively and drive future value for our shareholders. And we believe it's also a price that allows CNS to be able to be a successful operator in the future as well. So very much consistent with what we were thinking and would keep us on track with the commitments that we shared when we announced the deal back in October.

從長遠來看，它將幫助我們簡化過渡服務，更有效地管理合併後的新公司，並為我們的股東帶來未來價值。我們相信，這個價格也能讓 CNS 在未來成為一家成功的運營商。這與我們的想法非常一致，並且將使我們能夠履行我們在 10 月份宣布該交易時所做出的承諾。

Our next question is from Kenneth B. Goldman from JPMorgan.

我們的下一個問題來自摩根大通的肯尼思·B·戈德曼。

You mentioned you're seeing volumes start to improve a little bit. It's kind of going the other way for a lot of your branded, I guess, center store packaged food vendors. You highlighted that your store brands are doing better. Maybe that explains much of the difference. But I'm also curious if you're seeing consumers change their behavior a little bit in terms of which departments they're shopping. And I guess the core question there is, has there been a boost that you're seeing to your perimeter maybe at the expense of the center store? Just wanted to get a little more color on where those volumes are getting, I don't know if less bad is the right phrase, or better?

您提到您看到銷量開始有所改善。我想，對於許多品牌中心商店的包裝食品供應商來說，這有點相反。您強調說您的商店品牌做得更好。也許這可以解釋大部分差異。但我也很好奇你是否看到消費者在購買哪些部門方面的行為發生了一些改變。我想核心問題是，您是否看到周邊商店的擴張可能會以犧牲中心商店為代價？只是想對這些卷的進展情況有更多的了解，我不知道“不太糟糕”是正確的說法，還是更好？

Yes. In terms of volume, there's a couple of things. One, if you look at like in the meat department, for an example, you're seeing people much more move to hamburger meat or we call it grinds, but I don't know that many people publicly would do that, or chicken and some of those things. So you are starting to see some improvement in tonnage relative to that.

是的。就數量而言，有幾件事。一，例如，如果你看看肉類部門，你會看到人們更多地轉向漢堡包肉，或者我們稱之為研磨物，但我不知道很多人會公開這樣做，或者雞肉和其中一些事情。因此，您開始看到相對於此的噸位有所改善。

You are also seeing people moving to the entry price point in many cases. And obviously, that would be affecting the CPGs. And I mentioned in the prepared remarks, we are beginning to see some CPGs be more aggressive on partnering, on moving their tonnage as well. So all of those things are happening, but you're never satisfied with where you are. But the trends are starting to improve, and there's a ton of focus on making sure that we're supporting that customer on a budget as well.

在許多情況下，您還會看到人們轉向入門價格點。顯然，這會影響消費品。我在準備好的發言中提到，我們開始看到一些快速消費品公司在合作和轉移噸位方面更加積極。所有這些事情都在發生，但你永遠不會對自己所處的位置感到滿意。但趨勢正在開始改善，並且我們非常關注確保我們也在預算範圍內為該客戶提供支持。

And then as a follow-up, I think what concerns some investors about disinflation and possible deflation is that even though deflation has been a rare thing, the last time it came around it did last for a fairly long time, a couple of years. It helped drive a competitive environment in which gross margins actually declined and your core operating income was down as well.

接下來，我認為一些投資者對通貨緊縮和可能的通貨緊縮感到擔憂的是，儘管通貨緊縮一直是罕見的事情，但上次出現時確實持續了相當長的時間，幾年。它有助於推動競爭環境，在這種環境中，毛利率實際上下降了，您的核心營業收入也下降了。

So I guess what I'm curious about is, what gives you the confidence that -- in a world where consumers are struggling more, that your competitors will remain as rational as they are today? And to what extent does your guidance potentially factor the risk of them being a little bit less rational, I guess?

所以我想我好奇的是，是什麼讓你有信心——在一個消費者更加掙扎的世界裡，你的競爭對手將保持像今天一樣理性？我猜你的指導在多大程度上可能會導致他們變得不那麼理性？

Yes. We always -- when you look at our long-term model, we always assume the market will get more competitive than it is because that's been the case for the last 10 years, 20 years, 30 years, and customers get the benefit of that. The other thing that's built into our model that's different today is if you look at our diversified income streams, alternative businesses are well north of $1 billion. That business didn't even exist the last time when the economy was tough, as an example.

是的。當你審視我們的長期模型時，我們總是假設市場的競爭會比實際情況更加激烈，因為過去 10 年、20 年、30 年都是如此，客戶會從中受益。我們今天的模型中的另一件事是，如果你看看我們多元化的收入來源，就會發現另類業務遠遠超過 10 億美元。例如，上次經濟困難時，該業務甚至不存在。

If you look at from a seamless standpoint, the retail media which is obviously part of the alternative profit business, those margins are completely different than the supermarket margins.

如果你從無縫的角度來看，零售媒體顯然是另類利潤業務的一部分，那麼這些利潤與超市的利潤完全不同。

So all of those things are things that are part of the model and part of the long-term thinking. But the thing that I think is always important to remind people is even in the scenario you've outlined, we still were significantly above our cost of capital, significantly generating economic value for shareholders, the stock price didn't but if you look at the value of the company. And we continue to generate cash flow that we used to pay a dividend and buy back stock and balance our debt. So all of those things, I think, are important parts of it but it is a different market model today than it was the last time.

因此，所有這些都是模型的一部分，也是長期思考的一部分。但我認為始終重要的是要提醒人們，即使在您概述的情況下，我們仍然遠遠高於我們的資本成本，為股東顯著創造了經濟價值，但股價卻沒有，但如果您看看公司的價值。我們繼續產生現金流，用於支付股息、回購股票和平衡債務。因此，我認為所有這些都是其中的重要組成部分，但今天的市場模式與上次不同。

Our next question is from Ed Kelly from Wells Fargo.

我們的下一個問題來自富國銀行的埃德·凱利。

Guys, can you hear me?

伙計們，你能聽到我說話嗎？

We can now. Go ahead, Ed.

我們現在可以了。繼續吧，艾德。

We'll move on to the next question.

我們將繼續討論下一個問題。

Our next question is from Kelly Bania from BMO.

我們的下一個問題來自 BMO 的 Kelly Bania。

This is Kelly Bania. I think I'm up. Thanks, Ed. I guess...

這是凱莉·巴尼亞。我想我起來了。謝謝，艾德。我猜...

We can hear you, Kelly.

我們能聽到你的聲音，凱利。

Good. I wanted to ask about the divestiture package. I think the comment was made that the valuation for this is slightly below the 3x 4-wall EBITDA that the SpinCo was structured at. And so I guess, just can you comment on why that would be in Kroger's best interest to accept a lower valuation than what was available through SpinCo if that was a viable option? And are you willing to share the estimated EBITDA or EBITDA margin for these planned 413 stores?

好的。我想問一下剝離方案的情況。我認為有人評論說，這一估值略低於剝離公司結構的 3 倍 4 牆 EBITDA。所以我想，如果這是一個可行的選擇，那麼您能否評論一下為什麼克羅格接受比剝離公司提供的估值更低的估值才符合克羅格的最佳利益？您是否願意分享這 413 家門店的預計 EBITDA 或 EBITDA 利潤率？

Kelly, yes, thanks for the question. Essentially, when we think about the SpinCo option that we announced when we communicated the merger with Albertsons, just as a sort of a recap, SpinCo was an option that was always going to be a solution alongside other solutions. The package that would have been involved with SpinCo as a group of stores would have covered certain geographies, but it would not have covered the whole of the store footprint geographically that would need to be divested that we always sort of contemplated as part of the plan to take to the FTC.

凱利，是的，謝謝你的提問。從本質上講，當我們考慮與艾伯森溝通合併時宣布的分拆公司選項時，作為一種回顧，分拆公司是一個始終與其他解決方案並列的解決方案。分拆公司作為一組商店涉及的一攬子計劃將覆蓋某些地區，但它不會覆蓋整個地區的商店足跡，而我們總是將其作為計劃的一部分考慮剝離。向聯邦貿易委員會提交。

So we would always have had to have put together SpinCo with another buyer, which adds significant complexity both from the perspective of working with 2 different companies around their future plans to take forward to the FTC, but also the complexity around transition services agreement, technology solutions, sort of implementing, if you like, a period of time where the companies need to operate and separate effectively.

因此，我們總是不得不將分拆公司與另一家買家放在一起，這不僅從與兩家不同公司就其向聯邦貿易委員會提交的未來計劃進行合作的角度來看，而且從過渡服務協議、技術方面的複雜性來看，這都增加了顯著的複雜性。解決方案，如果你願意的話，可以說是實施公司需要有效運營和分離的一段時間。

So when we looked at the options that were available, I would say that from day 1, we always viewed SpinCo as a viable option. But if we believe we could find a single buyer that was able to do everything that C&S can do, which is bring a strong plan, a strong capable management team, a well-capitalized balance sheet, commitment to investing in the business in the future and then being able to put together a set of assets for them that will enable them to do that, we always believed that, that would likely be both a more effective solution to move forward with but also, longer term, a better solution for Kroger to be able to execute on a plan.

因此，當我們考慮可用的選項時，我想說，從第一天起，我們始終將分拆公司視為可行的選擇。但如果我們相信我們能夠找到一個能夠完成 C&S 能做的一切的買家，即帶來強有力的計劃、強大的有能力的管理團隊、資本充足的資產負債表以及對未來業務投資的承諾然後能夠為他們整合一組資產，使他們能夠做到這一點，我們始終相信，這可能是一個更有效的解決方案，而且從長遠來看，對克羅格來說也是一個更好的解決方案能夠執行計劃。

So it's why -- I know we didn't go into specific details when we announced the transaction back in October. But when we assumed evaluation in our models with the commitments that we shared around being accretive to EPS in year 1 without onetime costs and improvement of $1 billion of synergy over 4 years, and all the other metrics that we shared, all of that was based on a valuation that's essentially in line with the valuation that we announced today with C&S.

這就是為什麼——我知道我們在 10 月份宣布交易時沒有透露具體細節。但是，當我們在模型中假設評估時，我們承諾在第一年增加每股收益，無需一次性成本，並在4 年內提高10 億美元的協同效應，以及我們共享的所有其他指標，所有這些都是基於估值與我們今天與 C&S 宣布的估值基本一致。

So very consistent with what we were assuming. But obviously, the only answer we could actually share when we announced the deal was SpinCo because we haven't had chance to talk to any buyers at that point. That was the only plan that was really fully baked through as part of the discussions with Albertsons.

與我們的假設非常一致。但顯然，當我們宣布交易時，我們真正可以分享的唯一答案是分拆公司，因為當時我們還沒有機會與任何買家交談。這是與艾伯森討論的唯一真正完全落實的計劃。

Okay. That's very helpful. And would -- should we assume that the additional 200 potential stores would be under a similar or the same valuation? Just a quick question there. And then also, can you help us understand the financing structure and the commitment from C&S partner here with SoftBank to this transaction and the potential for the incremental 200 stores?

好的。這非常有幫助。我們是否應該假設另外 200 家潛在商店的估值類似或相同？只是一個簡單的問題。另外，您能否幫助我們了解融資結構以及 C&S 合作夥伴與軟銀對本次交易的承諾以及新增 200 家門店的潛力？

Yes. Thanks, Kelly. Well, first of all, in terms of the incremental stores, we certainly share more details on that if that was required. But as we shared earlier, we feel really good about the plan that we have. We believe it's a very strong package and it really does address all of the questions and feedback that we've sort of received and evaluated as we thought about the plan. So our focus is really on moving forward with that plan. But we did think it was important to build flexibility into the agreement so that if we have to flex, we're able to do that.

是的。謝謝，凱利。好吧，首先，就增量商店而言，如果需要的話，我們當然會分享更多細節。但正如我們之前分享的，我們對我們的計劃感覺非常好。我們相信這是一個非常強大的一攬子計劃，它確實解決了我們在考慮該計劃時收到和評估的所有問題和反饋。因此，我們的重點實際上是推進該計劃。但我們確實認為在協議中建立靈活性很重要，這樣如果我們必須靈活，我們就能夠做到這一點。

I wouldn't be able to comment on C&S' financing strategy. That's obviously specific to them, and that will be something for them to comment on if they wanted to. I would just say that from our perspective, we got very comfortable with their financing strategy and feel they both have the financial strength to be able to complete the transaction but also the financial strength to be able to keep investing in the business going forward as well.

我無法評論 C&S 的融資策略。這顯然是他們特有的，如果他們願意的話，這將是他們可以發表評論的事情。我只想說，從我們的角度來看，我們對他們的融資策略非常滿意，並認為他們都有足夠的財務實力來完成交易，而且也有足夠的財務實力能夠繼續投資於業務的發展。

Our next question is from Rupesh Parry from Oppenheimer.

我們的下一個問題來自奧本海默的魯佩什·帕里。

So I just wanted to touch on the promotional competitive backdrop. Just curious what you guys are seeing right now in the promotional environment. Any changes on the competitive front lately? And then just curious, as there is waning inflation out there and there is a clear desire for the industry to drive volumes, so just curious if you guys expect it to become more promotional in the coming months or quarters.

所以我只想談談促銷競爭背景。只是好奇你們現在在促銷環境中看到了什麼。最近競爭方面有什麼變化嗎？然後只是好奇，因為通貨膨脹正在減弱，並且該行業明顯希望推動銷量，所以只是好奇你們是否期望它在未來幾個月或幾個季度變得更加促銷。

Yes. If you look at overall, the promotional activity is getting close to where it was pre-COVID. So it's pretty consistent with where we expected it to be. And obviously during COVID, the supply chains were such a mess and it's really those are recovering.

是的。總體來看，促銷活動已接近新冠疫情爆發前的水平。所以它與我們的預期非常一致。顯然，在新冠疫情期間，供應鏈非常混亂，但實際上這些供應鏈正在恢復。

If you look at the conversations with CPGs, it's getting -- for the most part it's getting much more back to normal in terms of how do you grow units. And the CPGs, in some cases, raise their own margins and now they're starting to focus on tonnage again. So for us, we feel like it's a good healthy dialogue and it's one of the reasons, as you know, that we believe Our Brands is such an important part of our overall go-to-market equation for customers. Because if the CPGs are doing things that aren't justifiable, Our Brands always gain share because we have an amazing set of products. And when people try them, the repeat rate is incredibly strong as well.

如果你看看與快速消費品公司的對話，你會發現，在很大程度上，就如何增長單位而言，它正變得更加正常。在某些情況下，快速消費品公司提高了自己的利潤，現在他們開始再次關注噸位。因此，對我們來說，我們覺得這是一次良好健康的對話，正如您所知，這也是我們相信我們的品牌是我們面向客戶的整體市場營銷等式的重要組成部分的原因之一。因為如果快速消費品做不合理的事情，我們的品牌總是會獲得份額，因為我們擁有一套令人驚嘆的產品。當人們嘗試它們時，重複率也非常高。

Great. And then maybe just 1 follow-up question. So as you look at the consumer backdrop for the balance of the year, is your team assuming it stays pretty similar to what you've seen recently? Or do you expect to get worse? And just -- I also wanted to just get a sense of how you think about student loan impacts on grocery.

偉大的。然後也許只有 1 個後續問題。那麼，當您審視今年剩餘時間的消費者背景時，您的團隊是否認為它與您最近看到的情況非常相似？或者你預計情況會變得更糟？我還想了解一下您如何看待學生貸款對雜貨店的影響。

Yes, That's -- I was going to say if you hadn't added the last part, that's the one part where we do expect it will get -- from an environment standpoint, from a consumer standpoint, that it will be a little tougher is the student loan repayments. And you don't know for sure until it happens. We do believe that the impact on grocery would be less than other categories. So we've assumed that to be a headwind, but the specifics until it happens, you just don't know.

是的，那就是——我想說的是，如果你沒有添加最後一部分，這就是我們期望它會得到的部分——從環境的角度來看，從消費者的角度來看，這會有點困難是學生貸款的償還。在事情發生之前你無法確定。我們確實相信，對食品雜貨的影響將小於其他類別。所以我們假設這是一個逆風，但在它發生之前，具體細節你是不知道的。

And on that, Rupesh, when we talk to customers about it we know it's going to be a meaningful financial impact on their overall budget, which obviously creates some risk that we've factored into our thinking. What customers also say, though, is that one of the first places they go to adjust their budgets to pay for the incremental cost is to eat more food at home versus eating out. So it would be interesting to see if that turns out to be a trend that's helpful over time as well.

關於這一點，Rupesh，當我們與客戶談論這個問題時，我們知道這將對他們的總體預算產生有意義的財務影響，這顯然會帶來一些風險，我們已經將其納入考慮範圍。不過，顧客還表示，他們首先調整預算以支付增量成本的地方之一就是在家吃更多食物，而不是外出就餐。因此，看看隨著時間的推移，這是否會成為一種有幫助的趨勢，將會很有趣。

Our next question is from Ed Kelly from Wells Fargo.

我們的下一個問題來自富國銀行的埃德·凱利。

Guys, can you hear me now?

伙計們，現在你能聽到我說話嗎？

We can. It sounds like a commercial.

我們可以。聽起來像廣告。

All right. I thought you were going to say you can't, so I'm happy to hear that you can. I wanted to ask about the sustainability of margin opportunity going forward. If we look at the back half of this year with, I guess, minimal comp, and it seems like maybe that's the environment for next year as well, you are getting benefit out of LIFO, gross margin, cost control is really good. But how do we think about the potential for continued improvement in those type of areas in '24 to offset what traditionally would be an environment where it's really difficult for grocers to actually get any earnings growth or even keep earnings flat?

好的。我以為你會說你不能，所以我很高興聽到你可以。我想問一下未來保證金機會的可持續性。如果我們看看今年下半年，我猜，補償是最低的，看起來也許這也是明年的環境，你將從後進先出中獲益，毛利率、成本控制都非常好。但是，我們如何看待 24 年此類領域持續改善的潛力，以抵消傳統上雜貨商很難真正實現盈利增長甚至保持盈利持平的環境？

Yes, Ed, it's a great question. What I would say is, as you know, we typically don't get into like forward guidance beyond the current year until later in the year. But what I would maybe comment on is if you look at the areas that we've called out as being tailwinds during the quarter that helped us on the gross margin rate, we think of those as more long-term drivers of our model versus sort of short-term, one-time benefit cycling prior activity in our business.

是的，艾德，這是一個很好的問題。我想說的是，如您所知，我們通常不會在今年晚些時候才提供前瞻性指引。但我可能要評論的是，如果你看看我們在本季度稱為順風的領域，這些領域幫助我們提高了毛利率，我們認為這些領域是我們模型的更長期驅動因素。我們業務中先前活動的短期、一次性利益循環。

And what I mean by that is if we look at Our Brands, Rodney mentioned it on the call earlier, but we've been doing a tremendous amount of work with our merchandising team in Our Brands really focusing on how do we continue to improve the portfolio both in terms of how we architect the products to get the maximum reach and value from each different product category across private selection, Simple Truth, Kroger brand and the Smart Way product range, how do we continue to innovate, how do we drive sourcing best practices.

我的意思是，如果我們看看我們的品牌，羅德尼早些時候在電話會議上提到過，但我們一直在與我們的品牌營銷團隊一起做大量的工作，真正關注的是我們如何繼續改進投資組合包括我們如何構建產品，以從私人選擇、Simple Truth、Kroger 品牌和 Smart Way 產品系列中的每個不同產品類別中獲得最大的影響力和價值，我們如何繼續創新，我們如何推動採購最佳實踐。

So really kind of taking almost a CPG type mindset to that approach to our products and saying, how do we maximize value. And I would say the team would probably tell you they're maybe 1/3 of the way through that work right now. So still a lot of opportunity, we believe, to continue to get stronger in Our Brands performance.

因此，我們實際上對我們的產品採取了一種幾乎是 CPG 類型的思維方式，並說，我們如何最大化價值。我想說，團隊可能會告訴你，他們現在可能已經完成了這項工作的 1/3。因此，我們相信，仍有很多機會繼續增強我們品牌的表現。

From a supply chain perspective, I mentioned it in my comments, but we continue to invest significantly in the supply chain because the team is doing a great job identifying ways in which we believe we can continue to drive efficiency in our supply chain strategy by leveraging data more effectively and technology, continuing to optimize the routes that we're taking, the capacity that we're utilizing on those routes.

從供應鏈的角度來看，我在評論中提到了這一點，但我們繼續在供應鏈上進行大量投資，因為該團隊在確定我們相信可以通過利用哪些方式繼續提高供應鏈戰略效率方面做得很好更有效地利用數據和技術，繼續優化我們正在採取的路線以及我們在這些路線上利用的容量。

And we believe there's still, again, a significant opportunity ahead of us there. Alternative profit, you've heard us talk about before as being we're still in the early innings of our mind about the potential for alternative profits can be, particularly as we keep growing digital and driving engagement through our Kroger Precision Marketing business.

我們相信，我們面前仍然存在著巨大的機遇。另類利潤，您之前聽過我們談論過，因為我們對另類利潤的潛力仍處於早期思考階段，特別是當我們不斷發展數字化並通過克羅格精準營銷業務推動參與度時。

So I think, overall, we would say that we've been on a journey for a few years that we've talked to investors about how do we manage these levers to be able to continue to improve profitability over time. And I'd say we have a good degree of confidence that we see continued plans in those areas. Now all that being said, obviously, we're going to continue to invest in the customer and continue to deliver more value there to balance that model so that we're driving top line growth over time as well.

因此，我認為，總的來說，我們可以說，我們已經踏上了幾年的旅程，我們已經與投資者討論瞭如何管理這些槓桿，以便能夠隨著時間的推移繼續提高盈利能力。我想說，我們非常有信心看到這些領域的持續計劃。話雖如此，顯然，我們將繼續對客戶進行投資，並繼續為客戶提供更多價值，以平衡該模式，以便隨著時間的推移，我們也能推動營收增長。

All right. And just a quick follow-up. I don't think Albertsons has had a large opioid settlement yet. Is that correct?

好的。只是快速跟進。我認為艾伯森尚未達成大規模阿片類藥物和解協議。那是對的嗎？

That would be correct.

那是正確的。

Our next question is from Robert Ohmes from Bank of America Merrill Lynch.

我們的下一個問題來自美銀美林的羅伯特·奧姆斯。

Can you guys hear me okay?

你們能聽到我說話嗎？

Yes, Robbie.

是的，羅比。

Excellent. You can hear me. Great. Two follow-up questions on the C&S deal. The first one, just the ADCs 2 headquarters -- regional headquarters, I guess, and the 5 private brands. Was that part of the original October outlined? Or is that sort of unique to this deal with C&S?

出色的。你能聽到我。偉大的。關於 C&S 交易的兩個後續問題。第一個，只是 ADC 2 總部——我猜是地區總部，還有 5 個自有品牌。這是最初的十月計劃的一部分嗎？或者說這對於 C&S 的交易來說是獨一無二的？

Yes. It's actually part -- it was one of those things where we knew that it would be part of the consideration. But until you had a specific buyer, you wouldn't know the specifics. So we had always had in the back of our mind that, that was something that might be needed in order to find a buyer that would be able to day 1 hit the ground running. But it wasn't -- it was one of those things where we could have managed it either way, depending on what the particular needs of that particular buyer would have been.

是的。它實際上是一部分——這是我們知道它將成為考慮因素的一部分的事情之一。但在找到特定買家之前，您不會知道具體細節。因此，我們一直在心裡認為，為了找到能夠在第一天就開始運作的買家，這可能是需要的。但事實並非如此——這是我們可以用任何一種方式來管理的事情之一，具體取決於特定買家的特定需求。

And the only thing I would add maybe, Rodney -- Robbie, would be that if you think about SpinCo, of course, SpinCo was going to be -- had to be set up as a full separate company. So it would have to be meaningful assets that would have moved with SpinCo for it to be a viable solution, not having any infrastructure other than what would have to move across from some of the Albertsons or Kroger business today. So that would have been probably more meaningful in terms of the impact that we sort of move forward with a buyer like C&S.

羅德尼——羅比，我唯一要補充的是，如果你考慮分拆公司，當然，分拆公司必須被設立為一家完全獨立的公司。因此，它必須是有意義的資產，可以與分拆公司一起轉移，這樣它才能成為一個可行的解決方案，除了今天必須從艾伯森或克羅格的一些業務轉移的基礎設施之外，沒有任何基礎設施。因此，就我們與 C&S 這樣的買家一起推進的影響而言，這可能更有意義。

Got you. That's helpful. And then it looks like there's a fair amount of Kroger and Harris Teeter stores as part of the plan. Was that part of the October thinking or like I noticed the Harris Teeter stores, I guess, in Virginia, like was that part of the original thinking? Or is there a greater mix of Kroger banners as part of this?

明白你了。這很有幫助。作為該計劃的一部分，似乎還有相當多的克羅格和哈里斯蒂特商店。這是十月想法的一部分，還是像我注意到弗吉尼亞州的哈里斯蒂特商店一樣，這就是最初想法的一部分？或者是否有更多的克羅格橫幅組合作為其中的一部分？

It was always part of the original thinking that some of the stores to be divested would be best for it to be Kroger stores. So that wasn't something that was new to the analysis that was done late last year.

最初的想法始終是，一些要剝離的商店最好是克羅格商店。因此，對於去年年底進行的分析來說，這並不是什麼新鮮事。

Got it. And what's the total Kroger banner stores in the C&S announcement?

知道了。 C&S 公告中的克羅格旗幟店總數是多少？

Yes. There isn't a specific number yet. We're still in the middle of the dialogue with the FTC so there wouldn't be specifics. In the press release, it wouldn't show by state the number of stores and the banners, but not -- there wouldn't be specifics at this point.

是的。目前還沒有具體數字。我們仍在與聯邦貿易委員會進行對話，因此不會有具體細節。在新聞稿中，它不會按州顯示商店和橫幅的數量，但不會——目前不會有具體細節。

Got you. And just last question, is there any difference in the expected dilution in year 1, whether you do 650 or 411?

明白你了。最後一個問題是，無論您選擇 650 還是 411，第一年的預期稀釋有什麼不同嗎？

Yes, As I mentioned earlier, Robbie, we're really focused on the 413 store plan because we have a high degree of confidence that, that addresses all the areas that we think are important to have a viable operator in the markets that we're divesting stores. And we believe the package is really effective in solving for that. So what we shared with the guidance back in October would still be very consistent now in our thinking based on the plans that we're moving forward with. And if obviously, if our plans were to change over time, we would share more details around that. But we feel we've got a really strong plan, and we feel the guidance that we've shared, nothing at this point would say that we have anything that would be a concern to move away from those guidances that we shared. And if anything, I would say, between the work that we've done now to identify the buy with C&S and some of the additional work we've been able to do in planning for the merger with -- in some respects with Albertsons, gives us a high degree of confidence that the plans that we shared are still very much the expectation.

是的，正如我之前提到的，羅比，我們確實專注於 413 家商店計劃，因為我們非常有信心，該計劃解決了我們認為在我們的市場中擁有可行的運營商非常重要的所有領域。重新剝離商店。我們相信該方案對於解決這個問題確實有效。因此，根據我們正在推進的計劃，我們在 10 月份分享的指導意見現在在我們的想法中仍然非常一致。顯然，如果我們的計劃隨著時間的推移而改變，我們將分享更多相關細節。但我們覺得我們已經有了一個非常強大的計劃，並且我們感受到了我們所分享的指導，目前沒有任何證據表明我們有任何問題需要放棄我們所分享的那些指導。如果說有什麼不同的話，我想說的是，我們現在所做的確定與C&S 的收購的工作，以及我們在計劃與Albertsons 合併時所做的一些額外工作——在某些方面，與Albertsons 的合併，讓我們充滿信心，我們所分享的計劃仍然符合我們的期望。

Our final question today comes from Dean Rosenblum from Bernstein.

我們今天的最後一個問題來自伯恩斯坦的迪安·羅森布魯姆。

I have 2 questions regarding the divested stores. The first question is there's a big debate about whether you guys are going to allow the acquirer now known as C&S to operate the stores under the banners that they're currently operating on. And I guess it's 2-part question there. One is if you -- are you going to allow C&S to operate the stores under their existing banners, yes or no? And if not, do you have any idea what the plan is for C&S in terms of rebranding the stores?

我有兩個關於剝離商店的問題。第一個問題是，關於你們是否會允許現在稱為 C&S 的收購方以他們目前正在經營的名義經營這些商店，存在著一場大爭論。我想這是由兩部分組成的問題。一是您是否允許 C&S 在其現有旗幟下經營這些商店，是還是否？如果沒有，您是否知道 C&S 在商店品牌重塑方面的計劃是什麼？

And then the second question is you mentioned 160 stores that C&S operates at retail. Can you share some detail on where those stores are actually located? Because there's very little geographic overlap between existing Piggly Wiggly stores and the locations where you've announced the divested stores to be.

第二個問題是你提到C&S有160家零售店。您能否分享一些有關這些商店實際位置的詳細信息？因為現有的 Piggly Wiggly 商店和您宣布剝離商店的地點之間幾乎沒有地理重疊。

Sure. Yes. Thanks for the question. So just to clarify on the bannering, what we shared this morning was that C&S will be provided with 3 banners that we'll be divesting as part of the plan, so Mariano's, QFC and Carrs are all banners that they will be essentially acquiring as part of the divestiture package. And they will also receive a license to operate under the Albertsons banner in 4 states, so that would be California, Colorado, Wyoming and...

當然。是的。謝謝你的提問。因此，為了澄清橫幅，我們今天早上分享的是 C&S 將獲得 3 個橫幅，作為計劃的一部分，我們將剝離這些橫幅，因此 Mariano's、QFC 和 Carrs 都是他們將本質上收購的橫幅剝離計劃的一部分。他們還將獲得在四個州以艾伯森旗下運營的許可證，即加利福尼亞州、科羅拉多州、懷俄明州和……

Arizona.

亞利桑那。

Arizona. Thanks, Rodney. So essentially, C&S, I won't speak for what their plans are. That's obviously their decision to move forward. But they will have the right to be able to use those banners and Albertsons in the 4 states I mentioned and the 3 other banners in any states they choose to use them and operate the stores. So that will be a decision they will make over time. But they would not keep -- if they ultimately buy stores that are different banners than those 4 today, they would need to rebanner those stores over a period of time.

亞利桑那。謝謝，羅德尼。所以本質上，C&S，我不會談論他們的計劃是什麼。這顯然是他們繼續前進的決定。但他們將有權在我提到的 4 個州使用這些橫幅和艾伯森，以及在他們選擇使用它們和經營商店的任何州使用其他 3 個橫幅。因此，這將是他們隨著時間的推移而做出的決定。但他們不會保留——如果他們最終購買的商店的橫幅與今天的這 4 家不同，他們將需要在一段時間內重新調整這些商店的橫幅。

And the stores they operate, Piggly Wiggly would be in the Midwest and the South, and the Grand Union would be in the Northeast.

他們經營的商店，Piggly Wiggly 將在中西部和南部，而 Grand Union 將在東北部。

Yes. We think that's a compelling part of the plan actually for C&S because it will introduce a new competitor in the markets where they have infrastructure and capability but are able to present a new competitor in that market as well.

是的。我們認為，對於C&S 來說，這實際上是該計劃中引人注目的一部分，因為它將在他們擁有基礎設施和能力的市場中引入新的競爭對手，但也能夠在該市場中引入新的競爭對手。

Yes. Thanks, Dean. And thanks, everyone, for all the questions. As always, I'd like to share a few comments directly with our associates listening in.

是的。謝謝，迪恩。謝謝大家提出的所有問題。一如既往，我想直接與我們的同事分享一些評論。

As the back-to-school season gets underway, we want to wish all families good luck on the upcoming school year and acknowledge our own associates who continue their education through our Feed Your Future program. Feed Your Future is our continuing education benefit that provides up to $21,000 for each associate over the course of their career to cover continuing education.

隨著返校季節的到來，我們希望祝所有家庭在即將到來的學年好運，並感謝我們自己的同事通過我們的“餵養你的未來”計劃繼續接受教育。 Feed Your Future 是我們的繼續教育福利，為每位員工在其職業生涯中提供高達 21,000 美元的繼續教育費用。

We are proud that since the program started in 2018, more than 16,000 associates have utilized this benefit with approximately 91% of these participants are being hourly associates. We're so thankful that you've chosen to grow your career with Kroger, and we're excited to see that number to continue to increase and we've committed to bringing this benefit to Albertsons once we merge as well.

我們感到自豪的是，自 2018 年該計劃啟動以來，已有超過 16,000 名員工利用了這項福利，其中約 91% 的參與者是小時工。我們非常感謝您選擇在克羅格發展您的職業生涯，我們很高興看到這個數字繼續增加，我們致力於在合併後為艾伯森帶來這一好處。

And then in closing, overall, Kroger is delivering consistent results, which reflect the strength of our business model that we've talked about in a challenged environment. By managing costs and growing alternative profit streams, we drove earnings growth and generated strong free cash flow again this quarter.

最後，總的來說，克羅格正在提供一致的結果，這反映了我們在充滿挑戰的環境中所討論的商業模式的優勢。通過管理成本和增加替代利潤流，我們推動了盈利增長，並在本季度再次產生了強勁的自由現金流。

We are proud of our ability to deliver these results while creating value for our customers. We are thankful for our incredible associates and their dedication to providing our customers a full, fresh and friendly experience.

我們為能夠在為客戶創造價值的同時交付這些成果而感到自豪。我們感謝我們出色的員工以及他們致力於為我們的客戶提供完整、新鮮和友好的體驗。

We are excited about the significant step Kroger has taken to fulfill our merger commitments through the divestiture plan, and we remain committed to fulfilling all the commitments we set out last year when we announced our proposed merger with Albertsons.

我們對克羅格通過剝離計劃履行合併承諾所採取的重要步驟感到興奮，並且我們仍然致力於履行我們去年宣布與艾伯森擬合併時提出的所有承諾。

Thanks again for everyone for joining us today. That concludes today's call.

再次感謝大家今天加入我們。今天的電話會議到此結束。

This concludes today's call. You may now disconnect your lines.

今天的電話會議到此結束。您現在可以斷開線路。