1 / 12

The Kroger Company

The Kroger Company. Module4. Kroger. 343,000 Employees Headquarter in Cincinnati Primary store is “combo store” Multi-department, Marketplace, Price Impact Stores as well Last Saturday in January Comparables are Whole Foods, Costco, Walmart. Source: Mergent Online.

fawn
Download Presentation

The Kroger Company

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The Kroger Company Module4

  2. Kroger • 343,000 Employees • Headquarter in Cincinnati • Primary store is “combo store” • Multi-department, Marketplace, Price Impact Stores as well • Last Saturday in January • Comparables are Whole Foods, Costco, Walmart

  3. Source: Mergent Online Quick flashback to module 2, Kroger is very different in that using 2% for NEA calculations would not work. They have very little cash on their balance sheet relatively.

  4. Trouble So Far -Tough to find comparables with grocery stores so far. Whole Foods and Costco have not seemed to fit, Walmart is a possibility. -Has to do with business models -Stock price is $38 dollars using comparables got prices as high as $140 (Sales)

  5. RNEA Growth • -2012/2013…what’s the difference? • -Inventory • -Operating Costs 2013 Costco RNEA: 15.5% Whole Foods RNEA: 16.67% Walmart RNEA:15.18%

  6. Enterprise Profit Margin • -This is where we are really going to see a difference across the board • -Think back to Whole Foods and the premium Eva talked about • -Also blended companies EPM (Kroger) 2013 2012 2011 2010 0.0187 0.0073 0.0169 0.0049 Walmart 2010 2011 2012 2013 EPM 4.67% 4.62% 3.39% 4.33% Costco EPM 0.017 0.0168 0.0208 Whole Foods EPM 3.11% 3.35% 3.97% 4.17%

  7. EPM from sales -Overall, not a large difference here with the exception of 2010. -Impairment charges -Discontinued operations -Gains/Loss from hedging

  8. Enterprise Asset Turnover -Generally pretty stable, especially with a grocery store company -Fluctuation is due to inventory as mentioned earlier -Whole Foods had the lowest EATO out of the industry comparables

  9. Kroger sales growth -Overall, very steady company in terms of growth the past couple of years -Feel good about using the 5.8% growth rate, so about 3% after inflation -Kroger sells products everyone needs…growth will come

  10. EPM/EATO averages -Took EPM from sales since it was more steady without the impairment charge in 2010 -With inventory fluctuation, took down estimate for average EATO a touch

  11. Projections

  12. Conclusion • -Grocery Stores are much harder to compare than I originally thought • -Trying to separate out enterprise and grocery sales are crucial in this set of four companies • -Feel confident with Krogers growth in the future • -Finding companies with similar characters besides just the leaders in market cap is what seems to be important for valuation purposes • -Look forward to actually finding some comparable companies to Kroger QUESTIONS?

More Related