The Kroger's CEO Discusses Q4 2011 Results - Earnings Call Transcript

Both our fourth quarter press release and our prepared remarks from this conference call will be available on our website at www.thekrogerco.com. After our prepared remarks, we look forward to taking your questions. [Operator Instructions] Thank you.

I will now turn the call over to Dave Dillon, Chairman and Chief Executive Officer of Kroger.

David B. Dillon

Thank you, Cindy, and good morning, everyone. Thank you for joining us today. With me to review Kroger's fourth quarter and full year 2011 results are Rodney McMullen, our company President and Chief Operating Officer; and Mike Schlotman, our Senior Vice President and Chief Financial Officer.

We are very pleased with Kroger's outstanding performance in fiscal year 2011 and strong fourth quarter financial results. That we were able to raise earnings per share and identical sales guidance through the year and achieve those higher results demonstrates the strength of our business strategy and momentum for a strong 2012.

Kroger's strong performance rewarded shareholders in 2011. We delivered adjusted earnings of $2 per diluted share, a 15% increase in earnings over 2010. We hit the high end of guidance despite a much higher LIFO charge. We increased our quarterly dividend payment by almost 10%, and we implemented an aggressive stock buyback program using Kroger's strong free cash flow to repurchase 67 million shares. Later, Rodney and Mike will provide more details on our full year performance. I'd like to highlight several of the commitments that our teams successfully delivered on in 2011.

Kroger increased identical supermarket sales. We grew market share. We effectively used free cash flow to reward shareholders and invested wisely to continue to win customer loyalty. Importantly, we also balanced cost reductions with investments in our Customer 1st strategy to increase FIFO operating margin for the year. Kroger is off to a healthy start for the year ahead, and we expect earnings per share growth in 2012 to exceed our business model.

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