The Kroger Co.

Good morning and welcome to the Kroger Co. third quarter 2022 earnings conference call. My name is Nadia and I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. Please note this event is being recorded. I would now like to turn the conference over to Robert Quast, Senior Director, Investor Relations. Please go ahead.

Good morning. Thank you for joining us for Kroger's third quarter 2022 earnings call. I am joined today by Progress Chairman and Chief Executive Officer Rodney McMullen and Chief Financial Officer Gary Millichap. 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 Company assumes no obligation to update that information. After our prepared remarks, we look forward to taking your questions. In order to cover a broad range of topics from as many of you as we can, we ask that you please limit yourself to one question and one follow-up question if necessary. I will now turn the call over to Rodney.

Thank you, Rob. Good morning, everyone, and thank you for joining us today. We're pleased to announce another quarter of strong results. powered by our strategy of leading with fresh and accelerating with digital. Our associates continue to create a seamless customer experience, delivering fresh and affordable food anytime, anywhere, with zero compromise on quality, selection, or convenience. Our associates' incredible dedication means we have momentum entering the fourth quarter, and we are continuing to consistently deliver a full, fresh, and friendly experience for our customers throughout the busy holiday season. It is clear that inflation remains top of mind for our customers and for our company. We are laser focused on helping our customers by providing fresh and affordable food. Research shows cooking at home is still three to four times less expensive than dining out. And we are seeing more customers engage with our brands as a way to stretch their food budgets without compromising on quality. During the quarter, we continue to see many of the same shopping trends we observed throughout the year. In addition to higher engagement with our brand's products, customers are downloading and redeeming digital coupons and continuing to showcase their cooking at home skills learned during the pandemic. Our breadth of choices, quality of fresh products, and the value of our personalized promotions are helping customers navigate the current environment. And our customer-focused approach is working. We continue to see overall household growth and significant loyal household growth, which drives a meaningful portion of our sales volume. We're proud to serve as America's grocer, especially during the holiday season. As friends and family come together, we look forward to providing our customers the perfect ingredients to create cherished memories. At a time when 48% of customers have told us they plan to cut back on their Thanksgiving celebration due to inflation, we took action and made sure Thanksgiving was enjoyable and memorable for everyone. To do that, we introduced an easy guide for customers to build an affordable meal of our brand's products with all of the Thanksgiving favorites that a family could enjoy for as little as $5 a person. This is just one example of how we create amazing quality at a great price when it matters most to our customers. We empower our customers to create lasting food memories by consistently executing against our go-to-market strategy, focused on fresh, our brands, personalization, and our seamless ecosystem. Fresh remains important in today's environment, and we are committed to bringing the freshest products to our customers' tables. Our fresh for everyone strategy is grounded in keeping products fresher, longer. Our end-to-end fresh initiative is transforming these efforts. At the end of quarter three, we have a total of 1,252 certified stores. At these locations, we see higher fresh sales and identical store sales. With these impressive results, we continue to roll out the initiative nationwide. As part of our end-to-end fresh initiative is our supply chain, where we continue to invest and enhance operations. We are improving productivity and maximizing our fleet by controlling more product movement across our network. Most importantly, we are using our data and science to maximize freshness for our customers. Beyond our end-to-end fresh program, we are bringing more fresh products to our customers. During the quarter, Home Chef launched new plant-based ready-to-cook meals. They also collaborated with Kroger's in-house dieticians to launch our new simple and nutritious healthy meal kits. Home Chef continues to be an exceptional example of how Kroger's history of mergers helped bring new and exciting capabilities to meet our customers' changing needs across the country. Turning to our brands, we delivered another strong quarter in our brands. with identical sales growth that outpaced overall identical sales. This was led by our Kroger and private selection brands. Customers continue to engage with our brand's portfolio, which offers high-quality products at affordable prices. Our brand products are loved by every member of the family, including the pets. This quarter, we saw tremendous growth in our pet food brands, as families continue to treat their dogs and cats. As you know, they're like a member of the family. We continue to expand and diversify our brand's portfolio at every price point. After launching SmartWay as our opening price point brand last quarter, we introduced several new SmartWay products this quarter and plan to roll out additional products next quarter. These products are meeting the needs of our customers on a budget and we've already seen 2 million households purchase SmartWay products. In regard to personalization, our customers are looking for opportunities to save on the products they love. Our loyalty programs and personalized promotions allow them to do just that. We continue to use our leading data science capabilities to develop unique customer insights and offer targeted promotions on the products we know they love. This strategy is driving digital engagement with digital coupon downloads 32% higher than last year. We anticipate these interactions will continue through the holidays with customers expected to realize more than $200 million in savings from our highly personalized digital offers. Moving on to Seamless. We're improving our seamless experience that brings our customers fresh products anytime, anywhere, with zero compromise on quality, selection, or convenience. We saw back-to-back quarters of strong digital growth led by our delivery solutions. This quarter, we introduced app enhancements that make it easier for customers to engage with our savings and promotion. We launched our first in-app flash sales and enabled our customers to clip digital offers directly from their cart. Improving the customer experience is always top of mind for us, and Kroger Pickup now offers three-hour pickup lead times at all stores in our network, with as little as one-hour lead time in some areas. We're investing in digital growth initiatives including expanding our Kroger delivery network in new and existing geographies. We are also growing BOOST, our one-of-a-kind membership program. This is the industry's most affordable membership program, and it is foundational to growing our delivery service. We are incredibly pleased with our customer response to BOOST as we rolled out the program nationwide earlier this year. We continue to invest in our associates as part of our long-term strategy. In addition to investing in average hourly rates this quarter, we enhanced the benefits available to our associates. We expanded the eligibility for our 401 plan participants to encourage earlier commitments to lifelong savings. And we took steps to continue supporting working parents by increasing family leave time and our company-sponsored benefit plans. We are excited to celebrate amazing associates this quarter who were recognized for their outstanding work and commitment to our customers. We were the most recognized employer for Progressive Grocers' GenNext honorees, with 28 of our young leaders recognized for driving change and innovation, both within the organizations and communities they serve. Additionally, our K-PASA Hispanic and Latino Associate Resource Group was honored by the U.S. Hispanic Chamber of Commerce as the Employee Resource Group of the Year. In summary, we are building momentum as we close out the year. We are excited to surprise and delight our customers this holiday season with high quality, fresh products at affordable prices. allowing customers to serve on the items that matter most. And with that, I'll turn it over to Gary to cover our financial results. Gary?