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Earnings Calls: 
The Kroger Fourth Quarter Earnings Call
Author: Rozalina Destanova
123jump.com
Last Update: 7:54 AM EDT March 14 2008

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The supermarket chain’s revenue increased to $17.2 billion from $16.9 billion a year earlier. Identical supermarket sales increased 8.2% with fuel and 5.3% without fuel. The company continues to drive solid identical sales growth by improving service, value, product quality, and selection for customers. For 2008, Kroger expects earnings of $1.83 to $1.90 a share and same-store-sales growth of 3% to 5%, excluding fuel sales.


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W. Rodney McMullen: If you look in the fourth quarter, we did not give the specifics, but we did gain share in both dollars and units. The gain in dollars was more than units, but if you look at the inflation it is higher in a lot of the corporate brand categories.

Robert Summers (Bear Stearns): There has been a lot of talk about Wal-Mart potentially taking price up at a slower rate than either CPI or product cost inflation. Is that something that you are seeing?

David B. Dillon: You will have to go look in Wal-Mart for yourself. We watch them and lots of other competitors to see, but I am not going to comment on their pricing strategy.

Robert Summers (Bear Stearns): You outlined the LIFO charge for next year that is about on line with what you did this year. If I try and extrapolate the trend in the fourth quarter I get to a number that is a lot higher. Could you comment on that?

J. Michael Schlotman: The reason the trend looks like that in the fourth quarter is that at the end of the third quarter we were projecting $130 million charge for the year and it wound up being a $154 million charge for the year. We had to take all of that $24 million in the fourth quarter. If we had known at the beginning of the year it was going to be $154 million about $16 million of that $24 million would have been spread over the first three quarters of the year.
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