CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
CONSOLIDATED BALANCE SHEETS | ||
Preferred shares, par per share (in dollars per share) | $ 100 | $ 100 |
Preferred shares, shares authorized | 5 | 5 |
Preferred shares, shares unissued | 5 | 5 |
Common shares, par per share (in dollars per share) | $ 1 | $ 1 |
Common shares, shares authorized | 2,000 | 2,000 |
Common shares, shares issued | 1,918 | 1,918 |
Common shares in treasury, shares | 1,258 | 1,198 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Change in pension and other postretirement defined benefit plans, income tax | $ (11) | $ (14) | $ (26) |
Unrealized gains and losses on cash flow hedging activities, income tax | (31) | 56 | (27) |
Amortization of unrealized gains and losses on cash flow hedging activities, income tax | $ 1 | $ 2 | $ 2 |
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
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Cash Flows from Operating Activities: | |||
Net earnings including noncontrolling interests | $ 2,672 | $ 2,169 | $ 2,249 |
Adjustments to reconcile net earnings including noncontrolling interests to net cash provided by operating activities: | |||
Depreciation and amortization | 3,246 | 3,125 | 2,965 |
Asset impairment charges | 98 | 69 | 68 |
Goodwill and fixed asset impairment charges related to Vitacost.com | 164 | ||
Operating lease asset amortization | 603 | 625 | 614 |
LIFO charge | 95 | 113 | 626 |
Share-based employee compensation | 175 | 172 | 190 |
Company-sponsored pension plans | (2) | (9) | (26) |
Deferred income taxes | (102) | (155) | 161 |
Gain on sale of assets | (70) | (56) | (40) |
Gain on sale of business | (79) | ||
Loss (gain) on investments | 148 | (151) | 728 |
Other | 22 | 78 | (8) |
Changes in operating assets and liabilities: | |||
Store deposits in-transit | (97) | (88) | (45) |
Receivables | (288) | 14 | (222) |
Inventories | (144) | 342 | (1,370) |
Prepaid and other current assets | (166) | 72 | (36) |
Accounts payable | 253 | 545 | 44 |
Accrued expenses | 107 | (222) | (167) |
Income taxes receivable and payable | 76 | 68 | (190) |
Operating lease liabilities | (609) | (695) | (622) |
Other | (144) | 772 | (585) |
Net cash provided by operating activities | 5,794 | 6,788 | 4,498 |
Cash Flows from Investing Activities: | |||
Payments for property and equipment, including payments for lease buyouts | (4,017) | (3,904) | (3,078) |
Proceeds from sale of assets | 377 | 101 | 78 |
Net proceeds from sale of business | 464 | ||
Other | (52) | 53 | (15) |
Net cash used by investing activities | (3,228) | (3,750) | (3,015) |
Cash Flows from Financing Activities: | |||
Proceeds from issuance of long-term debt | 10,502 | 15 | |
Payments on long-term debt including obligations under finance leases | (4,883) | (1,301) | (552) |
Dividends paid | (883) | (796) | (682) |
Financing fees paid | (116) | (84) | |
Proceeds from issuance of capital stock | 127 | 50 | 134 |
Treasury stock purchases | (4,156) | (62) | (993) |
Unsettled accelerated share repurchases | (1,000) | ||
Other | (81) | (76) | (112) |
Net cash used by financing activities | (490) | (2,170) | (2,289) |
Net increase (decrease) in cash and temporary cash investments | 2,076 | 868 | (806) |
Cash and temporary cash investments: | |||
Beginning of year | 1,883 | 1,015 | 1,821 |
End of year | 3,959 | 1,883 | 1,015 |
Reconciliation of capital investments: | |||
Payments for property and equipment, including payments for lease buyouts | (4,017) | (3,904) | (3,078) |
Payments for lease buyouts | 51 | 21 | |
Changes in construction-in-progress payables | 343 | 344 | (281) |
Total capital investments, excluding lease buyouts | (3,623) | (3,560) | (3,338) |
Disclosure of cash flow information: | |||
Cash paid during the year for net interest | 252 | 488 | 545 |
Cash paid during the year for income taxes | $ 681 | $ 751 | $ 698 |
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions |
Common Stock |
Additional Paid-In Capital |
Treasury Stock |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Earnings |
Noncontrolling Interest |
Total |
---|---|---|---|---|---|---|---|
Balances at Jan. 29, 2022 | $ 1,918 | $ 3,657 | $ (19,722) | $ (467) | $ 24,066 | $ (23) | $ 9,429 |
Balances (in shares) at Jan. 29, 2022 | 1,918 | ||||||
Balances (in shares) at Jan. 29, 2022 | 1,191 | ||||||
Issuance of common stock: | |||||||
Stock options exercised | $ 134 | 134 | |||||
Stock options exercised (in shares) | (4) | ||||||
Restricted stock issued | (173) | $ 62 | (111) | ||||
Restricted stock issued (in shares) | (4) | ||||||
Treasury stock activity: | |||||||
Treasury stock purchases, at cost | $ (821) | (821) | |||||
Treasury stock purchases, at cost (in shares) | 16 | ||||||
Stock options exchanged | $ (172) | (172) | |||||
Stock options exchanged (in shares) | 3 | ||||||
Share-based employee compensation | 190 | 190 | |||||
Other comprehensive income (loss) net of tax | (165) | (165) | |||||
Other | 131 | $ (131) | (10) | (10) | |||
Cash dividends declared per common share | (709) | (709) | |||||
Net earnings (loss) including noncontrolling interests | 2,244 | 5 | 2,249 | ||||
Balances at Jan. 28, 2023 | $ 1,918 | 3,805 | $ (20,650) | (632) | 25,601 | (28) | 10,014 |
Balances (in shares) at Jan. 28, 2023 | 1,918 | ||||||
Balances (in shares) at Jan. 28, 2023 | 1,202 | ||||||
Issuance of common stock: | |||||||
Stock options exercised | $ 50 | 50 | |||||
Stock options exercised (in shares) | (2) | ||||||
Restricted stock issued | (163) | $ 88 | (75) | ||||
Restricted stock issued (in shares) | (3) | ||||||
Treasury stock activity: | |||||||
Stock options exchanged | $ (62) | (62) | |||||
Stock options exchanged (in shares) | 1 | ||||||
Share-based employee compensation | 172 | 172 | |||||
Other comprehensive income (loss) net of tax | 143 | 143 | |||||
Other | 108 | $ (108) | 9 | 9 | |||
Cash dividends declared per common share | (819) | (819) | |||||
Net earnings (loss) including noncontrolling interests | 2,164 | 5 | 2,169 | ||||
Balances at Feb. 03, 2024 | $ 1,918 | 3,922 | $ (20,682) | (489) | 26,946 | (14) | $ 11,601 |
Balances (in shares) at Feb. 03, 2024 | 1,918 | 1,918 | |||||
Balances (in shares) at Feb. 03, 2024 | 1,198 | 1,198 | |||||
Issuance of common stock: | |||||||
Stock options exercised | $ 127 | $ 127 | |||||
Stock options exercised (in shares) | (3) | ||||||
Restricted stock issued | (176) | $ 92 | (84) | ||||
Restricted stock issued (in shares) | (3) | ||||||
Treasury stock activity: | |||||||
Treasury stock purchases, at cost | (1,000) | $ (4,038) | (5,038) | ||||
Treasury stock purchases, at cost (in shares) | 66 | ||||||
Stock options exchanged | $ (156) | $ (156) | |||||
Stock options exchanged (in shares) | 3 | ||||||
Share-based employee compensation | 175 | $ 175 | |||||
Other comprehensive income (loss) net of tax | (132) | (132) | |||||
Other | 166 | (166) | 3 | 3 | |||
Cash dividends declared per common share | (887) | (887) | |||||
Net earnings (loss) including noncontrolling interests | 2,665 | 7 | 2,672 | ||||
Balances at Feb. 01, 2025 | $ 1,918 | $ 3,087 | $ (24,823) | $ (621) | $ 28,724 | $ (4) | $ 8,281 |
Balances (in shares) at Feb. 01, 2025 | 1,918 | 1,918 | |||||
Balances (in shares) at Feb. 01, 2025 | 1,258 | 1,258 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREOWNERS' EQUITY (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
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CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | |||
Other comprehensive income, tax | $ (41) | $ 44 | $ (51) |
Cash dividends declared per common share (in dollars per share) | $ 1.25 | $ 1.13 | $ 0.99 |
ACCOUNTING POLICIES |
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ACCOUNTING POLICIES |
The following is a summary of the significant accounting policies followed in preparing these financial statements. Description of Business, Basis of Presentation and Principles of Consolidation The Kroger Co. (the “Company”) was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,731 supermarkets, 2,273 pharmacies and 1,702 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated. Fiscal Year The Company’s fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the -week period ended February 1, 2025, the -week period ended February 3, 2024 and the 52-week period ended January 28, 2023.Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates. Cash, Temporary Cash Investments and Book Overdrafts Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in “Accounts payable” and “Accrued salaries and wages” in the Consolidated Balance Sheets. Deposits In-Transit Deposits in-transit generally represent funds deposited to the Company’s bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction. Inventories Inventories are stated at the lower of cost (principally on a last-in, first-out “LIFO” basis) or market. In total, approximately 92% of inventories in 2024 and 91% of inventories in 2023 were valued using the LIFO method. The remaining inventories, including substantially all fuel inventories, are stated at the lower of cost (on a FIFO basis) or net realizable value. Replacement cost was higher than the carrying amount by $2,404 at February 1, 2025 and $2,309 at February 3, 2024. The Company follows the Link-Chain, Dollar-Value LIFO method for purposes of calculating its LIFO charge.
The item-cost method of accounting to determine inventory cost before the LIFO adjustment is followed for substantially all store inventories at the Company’s supermarket divisions. This method involves counting each item in inventory, assigning costs to each of these items based on the actual purchase costs (net of vendor allowances and cash discounts) of each item and recording the cost of items sold. The item-cost method of accounting allows for more accurate reporting of periodic inventory balances and enables management to more precisely manage inventory. In addition, substantially all of the Company’s inventory consists of finished goods and is recorded at actual purchase costs (net of vendor allowances and cash discounts). The Company evaluates inventory shortages throughout the year based on actual physical counts in its facilities. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the financial statement date. Property, Plant and Equipment Property, plant and equipment are recorded at cost or, in the case of assets acquired in a business combination, at fair value. Depreciation and amortization expense, which includes the depreciation of assets recorded under finance leases, is computed principally using the straight-line method over the estimated useful lives of individual assets. Buildings and land improvements are depreciated based on lives varying from 10 to 40 years. All new purchases of store equipment are assigned lives varying from to nine years. Leasehold improvements are amortized over the shorter of the lease term to which they relate, which generally varies from to 25 years, or the useful life of the asset. Food production plant, fulfillment center and distribution center equipment is depreciated over lives varying from to 15 years. Information technology assets are generally depreciated over to five years. Depreciation and amortization expense was $3,246 in 2024, $3,125 in 2023 and $2,965 in 2022. Interest costs on significant projects constructed for the Company’s own use are capitalized as part of the costs of the newly constructed facilities. Upon retirement or disposal of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any gain or loss is reflected in net earnings. Refer to Note 3 for further information regarding the Company’s property, plant and equipment. Leases The Company leases certain store real estate, warehouses, distribution centers, fulfillment centers, office space and equipment. The Company determines if an arrangement is a lease at inception. Finance and operating lease assets and liabilities are recognized at the lease commencement date. Finance and operating lease liabilities represent the present value of minimum lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, lease incentives and impairment, if any. To determine the present value of lease payments, the Company estimates an incremental borrowing rate which represents the rate used for a secured borrowing of a similar term as the lease. Lease terms generally range from 10 to 20 years with options to renew for at the Company’s sole discretion. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain the Company will exercise that option. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Operating lease payments are charged on a straight-line basis to rent expense over the lease term and finance lease payments are charged to interest expense and depreciation and amortization expense over the lease term. Assets under finance leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term, if shorter. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. For additional information on leases, see Note 9 to the Consolidated Financial Statements. Goodwill The Company reviews goodwill for impairment during the fourth quarter of each year, or earlier upon the occurrence of a triggering event. The Company performs reviews of each of its operating divisions and other consolidated entities (collectively, “reporting units”) that have goodwill balances. Generally, fair value is determined using a market multiple model, or discounted projected future cash flows, and is compared to the carrying value of a reporting unit for purposes of identifying potential impairment. Projected future cash flows are based on management’s knowledge of the current operating environment and expectations for the future. Goodwill impairment is recognized for any excess of the reporting unit’s carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Results of the goodwill impairment reviews performed during 2024, 2023 and 2022 are summarized in Note 2. Impairment of Long-Lived Assets The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred. These events include current period losses combined with a history of losses or a projection of continuing losses or a significant decrease in the market value of an asset. When a triggering event occurs, an impairment calculation is performed, comparing projected undiscounted future cash flows, utilizing current cash flow information and expected growth rates related to specific stores, to the carrying value for those stores. If the Company identifies impairment for long-lived assets to be held and used, the Company compares the assets’ current carrying value to the assets’ fair value. Fair value is based on current market values or discounted future cash flows. The Company records impairment when the carrying value exceeds fair market value. With respect to owned property and equipment held for disposal, the value of the property and equipment is adjusted to reflect recoverable values based on previous efforts to dispose of similar assets and current economic conditions. Impairment is recognized for the excess of the carrying value over the estimated fair market value, reduced by estimated direct costs of disposal. The Company recorded asset impairments totaling $98 in 2024, which includes $25, $19 net of tax, for property losses. The Company recorded asset impairments in the normal course of business totaling $69 and $68 in 2023 and 2022, respectively. Costs to reduce the carrying value of long-lived assets for each of the years presented have been included in the Consolidated Statements of Operations as Operating, general and administrative (“OG&A”) expense. Accounts Payable Financing Arrangement The Company has an agreement with a third party to provide an accounts payable tracking system which facilitates participating suppliers’ ability to finance payment obligations from the Company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not affected by suppliers’ decisions to finance amounts under this arrangement. The payment term that the Company has with participating suppliers under these programs is approximately 90 days. Outstanding obligations under this financing arrangement are included in “Accounts payable” in the Consolidated Balance Sheets. As of February 1, 2025 and February 3, 2024, the Company had $294 and $325 in “Accounts payable,” respectively, associated with financing arrangements. The following table summarizes the changes in the Company’s outstanding obligations under this financing arrangement through February 1, 2025:
Contingent Consideration The Company’s Home Chef business combination involved potential payment of future consideration that was contingent upon the achievement of certain performance milestones. The Company recorded contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value using a discount rate determined in accordance with accepted valuation methods. The liability for contingent consideration is remeasured to fair value at each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized in earnings until the contingency is resolved. In 2022, adjustments to increase the contingent consideration liability as of year-end were recorded for $20 in OG&A expense. The Company made the final contingent consideration payment in 2023, which was based on the fair value of the outstanding year-end 2022 liability. Store Closing Costs The Company regularly evaluates the performance of its stores and periodically closes those stores that are underperforming. Related liabilities arise, such as severance, contractual obligations and other accruals associated with store closings. The Company records a liability for costs associated with an exit or disposal activity when the liability is incurred, usually in the period the store closes. Adjustments to closed store liabilities primarily relate to actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the change becomes known. Owned stores held for disposal are reduced to their estimated net realizable value. Costs to reduce the carrying values of property, plant, equipment and operating lease assets are accounted for in accordance with the Company’s policy on impairment of long-lived assets. Inventory write-downs, if any, in connection with store closings, are classified in the Consolidated Statements of Operations as “Merchandise costs.” Costs to transfer inventory and equipment from closed stores are expensed as incurred. Interest Rate Risk Management The Company uses derivative instruments primarily to manage its exposure to changes in interest rates. The Company’s current program relative to interest rate protection and the methods by which the Company accounts for its derivative instruments are described in Note 6. Benefit Plans and Multi-Employer Pension Plans The Company recognizes the funded status of its retirement plans on the Consolidated Balance Sheets. Actuarial gains or losses, prior service costs or credits and transition obligations that have not yet been recognized as part of net periodic benefit cost are required to be recorded as a component of Accumulated Other Comprehensive Income (“AOCI”). The Company has elected to measure defined benefit plan assets and obligations as of January 31, which is the month-end that is closest to its fiscal year-ends. The determination of the obligation and expense for company-sponsored pension plans and other post-retirement benefits is dependent on the selection of assumptions used by actuaries and the Company in calculating those amounts. Those assumptions are described in Note 14 and include, among others, the discount rate, the expected long-term rate of return on plan assets, mortality and the rates of increase in compensation and health care costs. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect the recognized expense and recorded obligation in future periods. While the Company believes the assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the pension and other post-retirement obligations and future expense. The Company also participates in various multi-employer plans for substantially all union employees. Pension expense for these plans is recognized as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. Refer to Note 15 for additional information regarding the Company’s participation in these various multi-employer pension plans. The Company administers and makes contributions to the employee 401(k) retirement savings accounts. Contributions to the employee 401(k) retirement savings accounts are expensed when contributed or over the service period in the case of automatic contributions. Refer to Note 14 for additional information regarding the Company’s benefit plans. Share Based Compensation The Company recognizes compensation expense for all share-based payments granted under fair value recognition provisions. The Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award based on the fair value at the date of the grant. The Company grants options for common shares (“stock options”) to employees under various plans at an option price equal to the fair market value of the underlying shares on the grant date of the award. Stock options typically expire 10 years from the date of grant. Stock options vest between and four years from the date of grant. In addition to stock options, the Company awards restricted stock to employees and incentive shares to nonemployee directors under various plans. The restrictions on these restricted stock awards generally lapse between and four years from the date of the awards. The Company determines the fair value for restricted stock awards in an amount equal to the fair market value of the underlying shares on the grant date of the award.Deferred Income Taxes Deferred income taxes are recorded to reflect the tax consequences of differences between the tax basis of assets and liabilities and their financial reporting basis. Refer to Note 4 for the types of differences that give rise to significant portions of deferred income tax assets and liabilities. Uncertain Tax Positions The Company reviews the tax positions taken or expected to be taken on tax returns to determine whether and to what extent a benefit can be recognized in its consolidated financial statements. Refer to Note 4 for the amount of unrecognized tax benefits and other related disclosures related to uncertain tax positions. Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. As of February 1, 2025, the years ended January 31, 2021 and forward remain open for review for federal income tax purposes. The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions. Self-Insurance Costs The Company is primarily self-insured for costs related to workers’ compensation and general liability claims. Liabilities are actuarially determined and are recognized based on claims filed and an estimate of claims incurred but not reported. The liabilities for workers’ compensation claims are accounted for on a present value basis. The Company has purchased stop-loss coverage to limit its exposure to any significant exposure on a per claim basis. The Company is insured for covered costs in excess of these per claim limits. The following table summarizes the changes in the Company’s self-insurance liability through February 1, 2025:
The current portion of the self-insured liability is included in “Other current liabilities,” and the long-term portion is included in “Other long-term liabilities” in the Consolidated Balance Sheets. The Company maintains surety bonds related to self-insured workers’ compensation claims. These bonds are required by most states in which the Company is self-insured for workers’ compensation and are placed with third-party insurance providers to insure payment of the Company’s obligations in the event the Company is unable to meet its claim payment obligations up to its self-insured retention levels. These bonds do not represent liabilities of the Company, as the Company has recorded reserves for the claim costs. The Company also maintains insurance coverages for certain risks, including cyber exposure and property-related losses. The Company’s insurance coverage begins for these exposures ranging from $25 to $30. Revenue Recognition Sales The Company recognizes revenues from the retail sale of products, net of sales taxes, at the point of sale. Pharmacy sales are recorded when the product is provided to the customer. Digital channel-originated sales are recognized either upon pickup in store or upon delivery to the customer. Amounts billed to a customer related to shipping and delivery represent revenues earned for the goods provided and are classified as sales. When shipping is discounted, it is recorded as an adjustment to sales. Discounts provided to customers by the Company at the time of sale, including those provided in connection with loyalty cards, are recognized as a reduction in sales as the products are sold. Discounts provided by vendors, usually in the form of coupons, are not recognized as a reduction in sales provided the coupons are redeemable at any retailer that accepts coupons. The Company records a receivable from the vendor for the difference in sales price and cash received. For merchandise sold in one of the Company’s stores or online, tender is accepted at the point of sale. The Company acts as principal in certain vendor arrangements where the purchase and sale of inventory are virtually simultaneous. The Company records revenue and related costs on a gross basis for these arrangements. For pharmacy sales, collection of third-party receivables is typically expected within three months or less from the time of purchase. The third-party receivables from pharmacy sales are recorded in “Receivables” in the Company’s Consolidated Balance Sheets and were $622 as of February 1, 2025 and $616 as of February 3, 2024. Gift Cards and Gift Certificates The Company does not recognize revenue when it sells its own gift cards and gift certificates (collectively “gift cards”). Rather, it records a deferred revenue liability equal to the amount received. A sale is then recognized when the gift cards are redeemed to purchase the Company’s products. The Company’s gift cards do not expire. While gift cards are generally redeemed within 12 months, some are never fully redeemed. The Company recognizes gift card breakage under the proportional method, where recognition of breakage income is based upon the historical run-off rate of unredeemed gift cards. The Company’s gift card deferred revenue liability was $256 as of February 1, 2025 and $228 as of February 3, 2024. Disaggregated Revenues The following table presents sales revenue by type of product for the years ended February 1, 2025, February 3, 2024, and January 28, 2023:
Merchandise Costs The “Merchandise costs” line item of the Consolidated Statements of Operations includes product costs, net of discounts and allowances; advertising costs (see separate discussion below); inbound freight charges; warehousing costs, including receiving and inspection costs; transportation costs and food production costs. Warehousing, transportation and manufacturing management salaries are also included in the “Merchandise costs” line item; however, purchasing management salaries and administration costs are included in the “OG&A” line item along with most of the Company’s other managerial and administrative costs. Shipping and delivery costs associated with the Company’s digital offerings originating from non-retail store locations are included in the “Merchandise costs” line item. Rent expense and depreciation and amortization expense are shown separately in the Consolidated Statements of Operations. Warehousing and transportation costs include distribution center direct wages, transportation direct wages, repairs and maintenance, utilities, inbound freight and, where applicable, third-party warehouse management fees. These costs are recognized in the periods the related expenses are incurred. The Company believes the classification of costs included in merchandise costs could vary widely throughout the industry. The Company’s approach is to include in the “Merchandise costs” line item the direct, net costs of acquiring products and making them available to customers. The Company believes this approach most accurately presents the actual costs of products sold. The Company recognizes all vendor allowances as a reduction in merchandise costs when the related product is sold. When possible, vendor allowances are applied to the related product cost by item and, therefore, reduce the carrying value of inventory by item. When the items are sold, the vendor allowance is recognized. When it is not possible, due to systems constraints, to allocate vendor allowances to the product by item, vendor allowances are recognized as a reduction in merchandise costs based on inventory turns and, therefore, recognized as the product is sold. Advertising Costs The Company’s advertising costs are recognized in the periods the related expenses are incurred and are included in the “Merchandise costs” line item of the Consolidated Statements of Operations. The Company’s advertising costs totaled $1,171 in 2024, $1,089 in 2023 and $1,030 in 2022. The Company does not record vendor allowances for co-operative advertising as a reduction of advertising expense. Operating, General and Administrative Expenses
OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Shipping and delivery costs associated with the Company's digital offerings originating from retail store locations, including third-party delivery fees, are included in the “OG&A” line item of the Consolidated Statements of Operations. Rent expense, depreciation and amortization expense and interest expense are shown separately in the Consolidated Statement of Operations. Consolidated Statements of Cash Flows For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be temporary cash investments. |
GOODWILL AND INTANGIBLE ASSETS |
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GOODWILL AND INTANGIBLE ASSETS |
The following table summarizes the changes in the Company’s net goodwill balance through February 1, 2025:
Testing for impairment is performed annually, or on an interim basis upon the occurrence of a triggering event or a change in circumstances that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The annual evaluation of goodwill and indefinite-lived intangible assets was performed during the fourth quarter of 2024, 2023 and 2022. The evaluation did not result in impairment in 2023. The evaluation resulted in an impairment of indefinite-lived trade name assets in 2024 and an impairment of goodwill in 2022. Based on the results of the Company’s impairment assessment in the fourth quarter of 2022, Vitacost.com recorded a $160 goodwill impairment. In the fourth quarter of 2022, as the Company’s digital strategy evolved, the Company’s primary focus was to effectively utilize its Pickup and Delivery capabilities. This reprioritization resulted in reduced long-term profitability expectations and a decline in the market value for one underlying channel of business and led to the pre-tax and after-tax impairment charge of $160. The pre-impairment goodwill balance for Vitacost.com was $160 as of the fourth quarter 2022. There is no goodwill remaining for Vitacost.com as of January 28, 2023. The following table summarizes the Company’s intangible assets balance through February 1, 2025:
Based on the results of the Company’s impairment assessment in the fourth quarter of , a $30, $24 net of tax, impairment was recognized for indefinite-lived trade names.Amortization expense associated with intangible assets totaled approximately $30, $42 and $52, during fiscal years 2024, 2023 and 2022, respectively. Future amortization expense associated with the net carrying amount of definite-lived intangible assets for the years subsequent to 2024 is estimated to be approximately:
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PROPERTY, PLANT AND EQUIPMENT, NET |
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PROPERTY, PLANT AND EQUIPMENT, NET |
Property, plant and equipment, net consists of:
Accumulated depreciation and amortization for leased property under finance leases was $915 at February 1, 2025 and $730 at February 3, 2024. Approximately $97 and $104 net book value of property, plant and equipment collateralized certain mortgages at February 1, 2025 and February 3, 2024 respectively. Capitalized implementation costs associated with cloud computing arrangements of $270, net of accumulated amortization of $97, and $257, net of accumulated amortization of $65, are included in “Other assets” in the Company’s Consolidated Balance Sheets as of February 1, 2025 and February 3, 2024, respectively. The corresponding cash flows related to these arrangements are included in “Net cash provided by operating activities” in the Company’s Consolidated Statements of Cash Flows. |
TAXES BASED ON INCOME |
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TAXES BASED ON INCOME |
The provision for taxes based on income consists of:
A reconciliation of the statutory federal rate and the effective rate follows:
The 2024 tax rate differed from the federal statutory rate due to a tax benefit from recognizing deferred tax assets related to the sale of Kroger Specialty Pharmacy, the benefit from share-based payments and the utilization of tax credits, partially offset by the effect of state income taxes. The 2023 tax rate differed from the federal statutory rate due to the effect of state income taxes and the nondeductible portion of opioid settlement charges, partially offset by the benefit from share-based payments and the utilization of tax credits. The 2022 tax rate differed from the federal statutory rate due to the effect of state income taxes and non-deductible goodwill impairment charges related to Vitacost.com, partially offset by the benefits from share-based payments and the utilization of tax credits. The tax effects of significant temporary differences that comprise tax balances were as follows:
As of February 3, 2024, deferred tax assets of $18 are included in “Other assets” in the Company’s Consolidated Balance Sheets. At February 1, 2025, the Company had net operating loss carryforwards for state income tax purposes of $1,283. The majority of these net operating loss carryforwards expire from 2025 through 2044. The utilization of certain of the Company’s state net operating loss carryforwards may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its state net operating losses. At February 1, 2025, the Company had state credit carryforwards of $7 which expire from 2025 through 2038. The utilization of certain of the Company’s credits may be limited in a given year. Further, based on the analysis described below, the Company has recorded a valuation allowance against some of the deferred tax assets resulting from its state credits. The Company regularly reviews all deferred tax assets on a tax filer and jurisdictional basis to estimate whether these assets are more likely than not to be realized based on all available evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing temporary differences is based on current tax law and the Company’s tax methods of accounting. Unless deferred tax assets are more likely than not to be realized, a valuation allowance is established to reduce the carrying value of the deferred tax asset until such time that realization becomes more likely than not. Increases and decreases in these valuation allowances are included in "Income tax expense" in the Consolidated Statements of Operations. As of February 1, 2025, February 3, 2024, and January 28, 2023, the total valuation allowance was $54, $55, and $83, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits, including positions affecting only the timing of tax benefits, is as follows:
As of February 1, 2025, February 3, 2024, and January 28, 2023 the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $70, $62, and $66, respectively. To the extent interest and penalties would be assessed by taxing authorities on any underpayment of income tax, such amounts have been accrued and classified as a component of income tax expense. During the years ended February 1, 2025, February 3, 2024, and January 28, 2023, the Company recognized approximately $4, $1, and $(6), respectively, in interest and penalties (recoveries). The Company had accrued approximately $19, $15, and $14 for the payment of interest and penalties as of February 1, 2025, February 3, 2024, and January 28, 2023, respectively. As of February 1, 2025, the years ended January 30, 2021 and forward remain open for review for federal income tax purposes. |
DEBT OBLIGATIONS |
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DEBT OBLIGATIONS |
Long-term debt consists of:
In 2024, the Company issued $10,500 of senior notes to pay a portion of the cash consideration for its proposed merger with Albertsons and general corporate purposes. The Company repaid certain senior notes of $4,700 that were subject to a special mandatory redemption due to the termination of the merger. For additional information related to these issuances and repayments, see Note 18 to the Consolidated Financial Statements. In 2023, the Company repaid $600 of senior notes bearing an interest rate of 3.85% and $500 of senior notes bearing an interest rate of 4.00%, all using cash on hand. On September 13, 2024, the Company entered into an unsecured revolving credit facility (the “Credit Agreement”), with a termination date of September 13, 2029, unless extended as permitted under the Credit Agreement. This Credit Agreement amended the Company’s $2,750 credit facility that would otherwise have terminated on July 6, 2026. Under the Credit Agreement, the aggregate amount of initial commitments under the revolving credit facility is $2,750, which could have been increased by $2,250 to $5,000 upon the closing date of the proposed merger with Albertsons (such additional commitments, the “Albertsons Closing Date Additional Commitments”). Concurrently with the termination of the Merger Agreement on December 11, 2024, the Albertsons Closing Date Additional Commitments were automatically terminated in accordance with the terms of the Credit Agreement. On and after December 11, 2024, the amount of outstanding commitments under the Credit Agreement is $2,750. Borrowings under the Credit Agreement bear interest, at the Company’s option, at either (i) adjusted Term Secured Overnight Financing Rate (“SOFR”) plus a market spread, based on the Company’s Public Debt Rating or (ii) the base rate, defined as the highest of (a) the Federal Funds Rate plus 0.5%, (b) Bank of America’s prime rate, and (c) one-month Term SOFR plus 1.0%, plus a market rate spread based on the Company’s Public Debt Rating. The Company will also pay a Commitment Fee based on its Public Debt Rating and Letter of Credit fees equal to a market rate spread based on the Company’s Public Debt Rating. “Public Debt Rating” means, as of any date, the rating that has been most recently announced by either S&P or Moody’s, as the case may be, for any class of non-credit enhanced long-term senior unsecured debt issued by the Company. The Credit Agreement contains a covenant, which, among other things, requires the maintenance of a leverage ratio of not greater than 3.50:1.00. The Company may repay the Credit Agreement in whole or in part at any time without premium or penalty. The Credit Agreement is not guaranteed by the Company’s subsidiaries. Cash paid for interest expense related to long term debt including obligations under finance leases was $554, $636 and $578 for 2024, 2023 and 2022, respectively. Interest income of approximately $311, $118 and $33 for 2024, 2023 and 2022, respectively, is included in “Net interest expense” in the Company’s Consolidated Statements of Operations. For additional information about the Company’s unsecured bridge term loan facility, term loan credit agreement and completed senior notes issuance related to the terminated Albertsons merger, see Note 18 to the Consolidated Financial Statements. As of February 1, 2025 and February 3, 2024, Other debt consisted primarily of a financial obligation related to a sale transaction for properties that did not qualify for sale-leaseback accounting treatment in 2021. As of February 1, 2025 and February 3, 2024, the Company had no commercial paper borrowings and no borrowings under the Credit Agreement. As of February 1, 2025, the Company had outstanding letters of credit in the amount of $261, of which $1 reduces funds available under the Credit Agreement. As of February 3, 2024, the Company had outstanding letters of credit in the amount of $314, of which $2 reduces funds available under the Credit Agreement. The letters of credit are maintained primarily to support performance, payment, deposit or surety obligations of the Company. Most of the Company’s outstanding public debt is subject to early redemption at varying times and premiums, at the option of the Company. In addition, subject to certain conditions, some of the Company’s publicly issued debt is subject to redemption, in whole or in part, at the option of the holder upon the occurrence of a redemption event, upon not less than five days’ notice prior to the date of redemption, at a redemption price equal to the default amount, plus a specified premium. “Redemption Event” is defined in the indentures as the occurrence of (i) any person or group, together with any affiliate thereof, beneficially owning 50% or more of the voting power of the Company, (ii) any one person or group, or affiliate thereof, succeeding in having a majority of its nominees elected to the Company’s Board of Directors, in each case, without the consent of a majority of the continuing directors of the Company or (iii) both a change of control and a below investment grade rating. The aggregate annual maturities and scheduled payments of long-term debt, as of year-end 2024, and for the years subsequent to 2024 are:
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DERIVATIVE FINANCIAL INSTRUMENTS |
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DERIVATIVE FINANCIAL INSTRUMENTS |
GAAP requires that derivatives be carried at fair value on the balance sheet and provides for hedge accounting when certain conditions are met. The Company’s derivative financial instruments are recognized on the balance sheet at fair value. Changes in the fair value of derivative instruments designated as “cash flow” hedges, to the extent the hedges are highly effective, are recorded in other comprehensive income, net of tax effects. Ineffective cash flow hedges, if any, are recognized in current period earnings. Other comprehensive income or loss is reclassified into current period earnings when the hedged transaction affects earnings. Changes in the fair value of derivative instruments designated as “fair value” hedges, along with corresponding changes in the fair values of the hedged assets or liabilities, are recorded in current period earnings. Ineffective fair value hedges, if any, are recognized in current period earnings. Changes in fair value of derivative instruments not designated as hedges are recognized in current period earnings and included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations. The Company assesses, both at the inception of the hedge and on an ongoing basis, whether derivatives used as hedging instruments are highly effective in offsetting the changes in the fair value or cash flow of the hedged items. If it is determined that a derivative is not highly effective as a hedge or ceases to be highly effective, the Company discontinues hedge accounting prospectively. Interest Rate Risk Management The Company is exposed to market risk from fluctuations in interest rates. The Company manages its exposure to interest rate fluctuations through the use of a commercial paper program, interest rate swaps (fair value hedges) and forward-starting interest rate swaps (cash flow hedges). The Company’s current program relative to interest rate protection contemplates hedging the exposure to changes in the fair value of fixed-rate debt attributable to changes in interest rates. To do this, the Company uses the following guidelines: (i) use average daily outstanding borrowings to determine annual debt amounts subject to interest rate exposure, (ii) limit the average annual amount subject to interest rate reset and the amount of floating rate debt to a combined total amount that represents 25% of the carrying value of the Company’s debt portfolio or less, (iii) include no leveraged products, and (iv) hedge without regard to profit motive or sensitivity to current mark-to-market status. The Company reviews compliance with these guidelines annually with the Finance Committee of the Board of Directors. These guidelines may change as the Company’s needs dictate. Fair Value Interest Rate Swaps The Company did not have any outstanding interest rate derivatives classified as fair value hedges as of February 1, 2025 or February 3, 2024. Cash Flow Forward-Starting Interest Rate Swaps The Company did not have any outstanding forward-starting interest rate swaps as of February 1, 2025. As of February 3, 2024, the Company had five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5,350. A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. The Company entered into these forward-starting interest rate swaps to hedge the variability in future benchmark interest payments attributable to changing interest rates on the forecasted issuance of fixed-rate debt that was issued in 2024. A notional amount of $2,350 of these forward-starting interest rate swaps was designated as a cash-flow hedge as defined by GAAP. Accordingly, the changes in fair value of these forward-starting interest rate swaps are recorded to accumulated other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. As of February 3, 2024, the fair value of the interest rate swaps designated as cash flow hedges was recorded in “ ” for $125 and accumulated other comprehensive income for $95, net of tax.The remainder of the notional amount of $3,000 of the forward-starting interest rate swaps was not designated as a cash-flow hedge. Accordingly, the changes in the fair value of these forward-starting interest rate swaps not designated as cash-flow hedges are recognized through net earnings. As of February 3, 2024, the fair value of these swaps was recorded in “ ” for $35 and “ ” for $3. In 2023, the Company recognized an unrealized gain of $174 related to these swaps that is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations.In 2024, the Company terminated these five forward-starting interest rate swaps with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5,350. For the notional amount of $2,350 of these forward-starting interest rate swaps that was designated as a cash-flow hedge, the unamortized gain of $48, $36 net of tax, has been deferred in accumulated other comprehensive income and will be amortized to earnings as the interest payments are made. For the remainder of the notional amount of $3,000 of the forward-starting interest rate swaps not designated as a cash-flow hedge, the Company recognized a realized loss of $55 that is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations. In 2024, the Company entered into two 10-year treasury lock agreements with an aggregate notional amount of $2,100 and a weighted-average interest rate of 3.91% and two 30-year treasury lock agreements with an aggregate notional amount of $3,250 and a weighted-average interest rate of 4.11%. These treasury locks were an agreement used to hedge the U.S. Treasury benchmark interest rate associated with future interest payments on the forecasted issuance of fixed-rate debt that was issued in 2024. These treasury locks were designated as cash-flow hedges as defined by GAAP. Accordingly, the changes in fair value of these treasury locks are recorded to accumulated other comprehensive income and reclassified into net earnings when the hedged transaction affects net earnings. In 2024, the Company terminated these treasury lock agreements. The unamortized loss of $56, $43 net of tax, has been deferred in accumulated other comprehensive loss and will be amortized to earnings as the interest payments are made. The following table summarizes the effect of the Company’s derivative instruments designated as cash flow hedges for 2024, 2023 and 2022:
For the above cash flow interest rate swaps, the Company has entered into International Swaps and Derivatives Association master netting agreements that permit the net settlement of amounts owed under their respective derivative contracts. Under these master netting agreements, net settlement generally permits the Company or the counterparty to determine the net amount payable for contracts due on the same date and in the same currency for similar types of derivative transactions. These master netting agreements generally also provide for net settlement of all outstanding contracts with a counterparty in the case of an event of default or a termination event. Collateral is generally not required of the counterparties or of the Company under these master netting agreements. As of February 1, 2025, no cash collateral was received or pledged under the master netting agreements. The effect of the net settlement provisions of these master netting agreements on the Company’s derivative balances upon an event of default or termination event is as follows as of February 3, 2024:
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FAIR VALUE MEASUREMENTS |
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FAIR VALUE MEASUREMENTS |
GAAP establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of the fair value hierarchy defined in the standards are as follows: Level 1 - Quoted prices are available in active markets for identical assets or liabilities; Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable; Level 3 - Unobservable pricing inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing an asset or liability. For items carried at (or adjusted to) fair value in the consolidated financial statements, the following tables summarize the fair value of these instruments at February 1, 2025 and February 3, 2024: February 1, 2025 Fair Value Measurements Using
February 3, 2024 Fair Value Measurements Using
The Company values interest rate hedges using observable forward yield curves. These forward yield curves are classified as Level 2 inputs. Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the impairment analysis of goodwill, other intangible assets, long-lived assets and in the valuation of store lease exit costs. The Company reviews goodwill and indefinite-lived intangible assets for impairment annually, during the fourth quarter of each fiscal year, and as circumstances indicate the possibility of impairment. See Note 2 for further discussion related to the Company’s carrying value of goodwill. Long-lived assets and store lease exit costs were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value hierarchy. See Note 1 for further discussion of the Company’s policies for impairments of long-lived assets and valuation of store lease exit costs. In 2024, long-lived assets with a carrying amount of $229 were written down to their fair value of $131, resulting in an impairment charge of $98, which includes $25, $19 net of tax, for property losses. In 2023, long-lived assets with a carrying amount of $72 were written down to their fair value of $3, resulting in an impairment charge of $69. Fair Value of Other Financial Instruments Current and Long-term Debt The fair value of the Company’s long-term debt, including current maturities, was estimated based on the quoted market prices for the same or similar issues adjusted for illiquidity based on available market evidence. If quoted market prices were not available, the fair value was based upon the net present value of the future cash flow using the forward interest rate yield curve in effect at respective year-ends. At February 1, 2025, the fair value of total debt excluding obligations under finance leases was $14,648 compared to a carrying value of $15,909. At February 3, 2024, the fair value of total debt excluding obligations under finance leases was $9,401 compared to a carrying value of $10,187. Contingent Consideration As a result of the Home Chef merger in 2018, the Company recognized a contingent liability of $91 on the acquisition date. The contingent consideration was measured using unobservable (Level 3) inputs and was included in “Other long-term liabilities” within the Consolidated Balance Sheet. The Company estimated the fair value of the earnout liability by applying a Monte-Carlo simulation method using the Company’s projection of future operating results for both the online and offline businesses related to the Home Chef merger and the estimated probability of achievement of the earnout target metrics. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of valuation paths in order to develop a reasonable estimate of the fair value of the earnout liability. The liability is remeasured to fair value using the Monte-Carlo simulation method at each reporting period, and the change in fair value, including accretion for the passage of time, is recognized in net earnings until the contingency is resolved. In 2020, the Company amended the contingent consideration agreement including the performance milestones to align with the Company’s current business strategies. In 2022, the Company recorded adjustments to increase the contingent consideration liability for $20 in OG&A. During 2023, the Company made the final contingent consideration payment of $83 which was based on the fair value of the outstanding year-end 2022 liability. Cash and Temporary Cash Investments, Store Deposits In-Transit, Receivables, Prepaid and Other Current Assets, Accounts Payable, Accrued Salaries and Wages and Other Current Liabilities The carrying amounts of these items approximated fair value due to their short-term nature. Other Assets The fair value of certain financial instruments, measured using Level 1 inputs, was $183 and $578 as of February 1, 2025 and February 3, 2024, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. The unrealized loss for these Level 1 investments was approximately $116 and $66 for 2024 and 2023, respectively, and is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations. In 2024, the Company fully exited its position in a Level 1 equity investment, receiving proceeds totaling approximately $303, resulting in a realized gain of $23, which is included in “(Loss) gain on investments” in the Company’s Consolidated Statements of Operations. The Company held other equity investments without a readily determinable fair value. These investments are measured initially at cost and remeasured for observable price changes to fair value through net earnings. The value of these investments was $96 and $92 as of February 1, 2025 and February 3, 2024, respectively, and is included in “Other assets” in the Company’s Consolidated Balance Sheets. There were no material observable price changes or impairments for these investments without a readily determinable fair value during 2024 or 2023, and as such, they are excluded from the fair value measurements table above for February 1, 2025 and February 3, 2024. The following table presents the Company’s remaining other assets as of February 1, 2025 and February 3, 2024:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) |
The following table represents the changes in AOCI by component for the years ended February 1, 2025 and February 3, 2024:
The following table represents the items reclassified out of AOCI and the related tax effects for the years ended February 1, 2025, February 3, 2024 and January 28, 2023:
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LEASES AND LEASE-FINANCED TRANSACTIONS |
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LEASES AND LEASE-FINANCED TRANSACTIONS |
The Company leases certain store real estate, warehouses, distribution centers, fulfillment centers, office space and equipment. The Company operates in leased facilities in approximately half of its store locations. generally range from 10 to 20 years with options to renew for varying terms at the Company’s sole discretion. Certain leases also include options to purchase the leased property. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Rent expense for leases with escalation clauses or other lease concessions are accounted for on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. Certain properties or portions thereof are subleased to for generally ranging from to 20 years. The following table provides supplemental balance sheet classification information related to leases:
The following table provides the components of lease cost:
Maturities of operating and finance lease liabilities are listed below. Amounts in the table include options to extend lease terms that are reasonably certain of being exercised.
Total future minimum rentals under non-cancellable subleases at February 1, 2025 were $269. The following table provides the weighted-average lease term and discount rate for operating and finance leases:
The following table provides supplemental cash flow information related to leases:
On May 17, 2018, the Company entered into a Partnership Framework Agreement with Ocado International Holdings Limited and Ocado Group plc (“Ocado”), which has since been amended. Under this agreement, Ocado will partner exclusively with the Company in the U.S., enhancing the Company’s digital and robotics capabilities in its distribution networks. In 2024, the Company did not open any additional Kroger Delivery customer fulfillment centers. The Company determined the arrangement with Ocado contains a lease of the robotic equipment used to fulfill customer orders. As a result, the Company establishes a finance lease when each facility begins fulfilling orders to customers. The base term of each lease is 10 years with options to renew at the Company’s sole discretion. The Company elected to combine the lease and non-lease elements in the contract. As a result, the Company will account for all payments to Ocado as lease payments. In 2024, the Company recorded finance lease assets of $91 and finance lease liabilities of $73 related to the Company’s agreement with Ocado. In 2023, the Company recorded finance lease assets of $147 and finance lease liabilities of $135 related to the Company’s agreement with Ocado. As of February 1, 2025 and February 3, 2024, the Company had $926 and $960, respectively, of net finance lease assets included within “Property, plant and equipment, net” in the Company’s Consolidated Balance Sheets related to the Company's agreement with Ocado. As of February 1, 2025 and February 3, 2024, the Company had $104 and $100, respectively, of current finance lease liabilities recorded within “Current portion of long-term debt including obligations under finance leases" and $781 and $814, respectively, of non-current finance lease liabilities recorded within “Long-term debt including obligations under finance leases” in the Company’s Consolidated Balance Sheets. |
EARNINGS PER COMMON SHARE |
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EARNINGS PER COMMON SHARE |
Net earnings attributable to The Kroger Co. per basic common share equals net earnings attributable to The Kroger Co. less income allocated to participating securities divided by the weighted average number of common shares outstanding. Net earnings attributable to The Kroger Co. per diluted common share equals net earnings attributable to The Kroger Co. less income allocated to participating securities divided by the weighted average number of common shares outstanding, after giving effect to dilutive stock options. The following table provides a reconciliation of net earnings attributable to The Kroger Co. and shares used in calculating net earnings attributable to The Kroger Co. per basic common share to those used in calculating net earnings attributable to The Kroger Co. per diluted common share:
The Company had combined undistributed and distributed earnings to participating securities totaling $20, $18 and $20 in 2024, 2023 and 2022, respectively. The Company had stock options outstanding for approximately 2.9 million, 2.8 million and 1.7 million shares, respectively, for the years ended February 1, 2025, February 3, 2024 and January 28, 2023, which were excluded from the computations of net earnings per diluted common share because their inclusion would have had an anti-dilutive effect on net earnings per diluted share. |
STOCK-BASED COMPENSATION |
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STOCK-BASED COMPENSATION | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION |
The Company recognizes compensation expense for all share-based payments granted. The Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award based on the fair value at the date of the grant. The Company grants options for common shares (“stock options”) to employees under various plans at an option price equal to the fair market value of the underlying shares on the grant date of the award. The Company accounts for stock options under the fair value recognition provisions. Stock options typically expire 10 years from the date of grant. Stock options vest between and four years from the date of grant.In addition to the stock options described above, the Company awards restricted stock to employees and incentive shares to nonemployee directors under various plans. The restrictions on the restricted share awards generally lapse between from the date of the awards. The Company determines the fair value for restricted stock awards in an amount equal to the fair market value of the underlying shares on the grant date of the award. and four yearsAt February 1, 2025, approximately 29 million common shares were available for future options or restricted stock grants under the 2019 Amended and Restated Long-Term Incentive Plan. Options granted reduce the shares available under the Plans at a ratio of one to one. Restricted stock grants reduce the shares available under the Plans at a ratio of 2.83 to one. Equity awards granted are based on the aggregate value of the award on the grant date. This can affect the number of shares granted in a given year as equity awards. Excess tax benefits related to equity awards are recognized in the provision for income taxes. Equity awards may be approved at one of four meetings of its Board of Directors occurring shortly after the Company’s release of quarterly earnings. The 2024 primary grants were made in conjunction with the March and June meetings of the Company’s Board of Directors. All awards become immediately exercisable upon certain changes of control of the Company. Stock Options Changes in options outstanding under the stock option plans are summarized below:
A summary of options outstanding, exercisable and expected to vest at February 1, 2025 follows:
Restricted stock Changes in restricted stock outstanding under the restricted stock plans are summarized below:
The weighted-average grant date fair value of stock options granted during 2024, 2023 and 2022 was $17.05, $15.17 and $15.91, respectively. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model, based on the assumptions shown in the table below. The Black-Scholes model utilizes accounting judgment and financial estimates, including the term option holders are expected to retain their stock options before exercising them, the volatility of the Company’s share price over that expected term, the dividend yield over the term and the number of awards expected to be forfeited before they vest. Using alternative assumptions in the calculation of fair value would produce fair values for stock option grants that could be different than those used to record stock-based compensation expense in the Consolidated Statements of Operations. The increase in the fair value of the stock options granted during 2024, compared to 2023, resulted primarily from increases in the Company’s share price and the expected dividend yield. The decrease in the fair value of the stock options granted during 2023, compared to 2022, resulted primarily from decreases in the Company’s share price, partially offset by an increase in the weighted-average risk-free interest rate. The following table reflects the weighted-average assumptions used for grants awarded to option holders:
The weighted-average risk-free interest rate was based on the yield of a treasury note as of the grant date, continuously compounded, which matures at a date that approximates the expected term of the options. The dividend yield was based on our history and expectation of dividend payouts. Expected volatility was determined based upon historical stock volatilities; however, implied volatility was also considered. Expected term was determined based upon historical exercise and cancellation experience. Total stock compensation recognized in 2024, 2023 and 2022 was $175, $172 and $190, respectively. Stock option compensation recognized in 2024, 2023 and 2022 was $15, $17 and $19, respectively. Restricted shares compensation recognized in 2024, 2023 and 2022 was $160, $155 and $171, respectively. The total intrinsic value of stock options exercised was $117, $55 and $159 in 2024, 2023 and 2022, respectively. The total amount of cash received by the Company was $127, $50 and $134 in 2024, 2023 and 2022, respectively, from the exercise of stock options granted under share-based payment arrangements. As of February 1, 2025, there was $204 of total unrecognized compensation expense remaining related to non-vested share-based compensation arrangements granted under the Plans. This cost is expected to be recognized over a weighted-average period of approximately two years. The total fair value of options that vested was $16, $16 and $19 in 2024, 2023 and 2022, respectively. Shares issued as a result of stock option exercises may be newly issued shares or reissued treasury shares. Proceeds received from the exercise of options, and the related tax benefit, may be utilized to repurchase the Company’s common shares under a stock repurchase program adopted by the Company’s Board of Directors. During 2024, the Company repurchased approximately three million common shares in such a manner. |
COMMITMENTS AND CONTINGENCIES |
12 Months Ended | ||
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Feb. 01, 2025 | |||
COMMITMENTS AND CONTINGENCIES. | |||
COMMITMENTS AND CONTINGENCIES |
The Company continuously evaluates contingencies based upon the best available evidence. The Company believes that allowances for loss have been provided to the extent necessary and that its assessment of contingencies is reasonable. To the extent that resolution of contingencies results in amounts that vary from the Company’s estimates, future earnings will be charged or credited. The principal contingencies are described below: Insurance — The Company’s workers’ compensation risks are self-insured in most states. In addition, other workers’ compensation risks and certain levels of insured general liability risks are based on retrospective premium plans, deductible plans and self-insured retention plans. The liability for workers’ compensation risks is accounted for on a present value basis. Actual claim settlements and expenses incident thereto may differ from the provisions for loss. Property risks have been underwritten by a subsidiary and are all reinsured with unrelated insurance companies. Operating divisions and subsidiaries have paid premiums, and the insurance subsidiary has provided loss allowances, based upon actuarially determined estimates. Litigation — Various claims and lawsuits arising in the normal course of business, including personal injury, contract disputes, employment discrimination, wage and hour and other regulatory claims are pending against the Company. Some of these suits purport or have been determined to be class actions and/or seek substantial damages. Although it is not possible at this time to evaluate the merits of all of these claims and lawsuits, nor their likelihood of success, the Company is of the belief that any resulting liability will not have a material effect on the Company’s financial position, results of operations, or cash flows. The Company continually evaluates its exposure to loss contingencies arising from pending or threatened litigation and believes it has made provisions where it is reasonably possible to estimate and when an adverse outcome is probable. Nonetheless, assessing and predicting the outcomes of these matters involves substantial uncertainties. Management currently believes that the aggregate range of loss for the Company’s exposure is not material to the Company. It remains possible that despite management’s current belief, material differences in actual outcomes or changes in management’s evaluation or predictions could arise that could have a material adverse effect on the Company’s financial condition, results of operations, or cash flows. The Company is one of dozens of companies that have been named in various lawsuits alleging that defendants contributed to create a public nuisance through the distribution and dispensing of opioids. On September 8, 2023, the Company announced that it reached an agreement in principle with plaintiffs to settle the majority of opioid claims that have been or could be brought against Kroger by states in which they operate, subdivisions, and Native American tribes. Along with the execution of certain non-monetary conditions that remain under discussion, the Company has agreed to pay up to $1,200 to states and subdivisions and $36 to Native American tribes in funding for abatement efforts, and approximately $177 to cover attorneys’ fees and costs. The exact payment amount will depend on several factors, including the extent to which states take action to foreclose opioid lawsuits by political subdivisions (e.g., by passing laws barring or limiting opioid lawsuits by political subdivisions), and the extent to which additional political subdivisions in participating states file additional opioid lawsuits against the Company. The settlement would allow for the full resolution of all claims on behalf of participating states, subdivisions and Native American tribes and is not an admission of any wrongdoing or liability. Certain opioid-related cases against the Company will remain pending in the multidistrict litigation and in various state courts after the settlement becomes effective, including those brought by nonparticipating states and subdivisions and private parties such as hospitals and third-party payors. The Company continues to defend these cases. As a result, the Company concluded that the agreement in principle for the settlement of opioid claims was probable, and for which the related loss was reasonably estimable. Accordingly, in 2023, the Company recognized opioid settlement charges of $1,413, $1,113 net of tax, relating to the nationwide opioid settlement framework. This charge is included in “Operating, general and administrative” in the Company’s Consolidated Statement of Operations. The agreement described above includes payments of approximately $1,236 and $177, in equal installments over 11 years and 6 years, respectively. In 2024, the Company made its first annual payment for $138 into an escrow account, which is recorded in “Prepaid and other current assets” in the Company’s Consolidated Balance Sheets. This escrow payment is recorded in “Prepaid and other current assets” within “Changes in operating assets and liabilities” in the Company’s Consolidated Statement of Cash Flows. In 2024, certain states and subdivisions confirmed their participation or lack of participation in the agreement described above, which resulted in immaterial changes to the settlement amount and timing of payments. On October 31, 2024, the Company determined that there is sufficient participation in the settlement by states and subdivisions and elected to proceed with the settlement. The settlement with states and subdivisions became effective on December 30, 2024, and the settlement with Native American tribes is currently anticipated to become effective by May 30, 2025. The Company also entered into separate agreements with certain states and their subdivisions in 2024 that resulted in immaterial changes to the settlement amount and timing of payments. In 2023, the Company recorded a charge of $62 relating to a settlement of opioid litigation claims with the State of West Virginia. The agreed upon settlement framework resolves all opioid lawsuits and claims by the West Virginia Attorney General. As of February 1, 2025, the Company recorded $279 and $1,139 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets related to these opioid settlements. As of February 3, 2024, the Company recorded $284 and $1,129 of the estimated settlement liability in “Other current liabilities” and “Other long-term liabilities,” respectively, in the Company’s Consolidated Balance Sheets related to these opioid settlements. The foregoing settlements are not admissions of wrongdoing or liability by the Company and the Company will continue to vigorously defend against any other claims and lawsuits relating to opioids that the settlements do not resolve, including private plaintiff litigation. The Company continues to believe it has strong legal defenses and appellate arguments in those cases. Because of the many uncertainties associated with any settlement arrangement or other resolution of opioid-related litigation matters, and because the Company continues to actively defend ongoing litigation for which it believes it has defenses and assertions that have merit, the Company is not able to reasonably estimate the range of ultimate possible loss for all opioid-related litigation matters at this time. Assignments — The Company is contingently liable for leases that have been assigned to various third parties in connection with facility closings and dispositions. The Company could be required to satisfy the obligations under the leases if any of the assignees is unable to fulfill its lease obligations. Due to the wide distribution of the Company’s assignments among third parties, and various other remedies available, the Company believes the likelihood that it will be required to assume a material amount of these obligations is remote.
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Feb. 01, 2025 | |||
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STOCK |
Preferred Shares The Company has authorized five million shares of voting cumulative preferred shares; two million shares were available for issuance at February 1, 2025. The shares have a par value of $100 per share and are issuable in series. Common Shares The Company has authorized two billion common shares, $1 par value per share. Common Stock Repurchase Program On December 11, 2024, the Company’s Board of Directors approved a $7,500 share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, including accelerated stock repurchase (“ASR”) transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “December 2024 Repurchase Program”). The December 2024 Repurchase Program authorization replaced the existing September 2022 Repurchase Program described below. On September 9, 2022, the Company’s Board of Directors approved a $1,000 share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the “September 2022 Repurchase Program”). No shares were repurchased under the September 2022 authorization. On December 30, 2021, the Company’s Board of Directors approved a $1.0 billion share repurchase program to reacquire shares via open market purchase or privately negotiated transactions, block trades, or pursuant to trades intending to comply with Rule 10b5-1 under the Exchange Act (the “December 2021 Repurchase Program”). The December 2021 Repurchase Program was exhausted during 2022. On December 6, 1999, the Company announced a program to repurchase common shares to reduce dilution resulting from our employee stock option and long-term incentive plans, under which repurchases are limited to proceeds received from exercises of stock options and the tax benefits associated therewith (“1999 Repurchase Program”). This program is solely funded by proceeds from stock option exercises, and the tax benefit from these exercises. On December 19, 2024, the Company entered into an ASR agreement with two financial institutions to reacquire, in aggregate, $5,000 in shares of Kroger common stock. The ASR agreement will be completed under the Company’s $7,500 share repurchase authorization. During 2024, the Company funded $5,000 and received a $4,000 initial delivery of approximately 65.6 million Kroger common shares at an average price of $61.54 per share. The total number of shares purchased by the Company pursuant to the ASR agreement will be based on the average of the volume-weighted average prices of Kroger common shares on specified dates during the term of each ASR agreement, less a discount, and subject to adjustments pursuant to the terms and conditions of the ASR agreement. Final settlement under the ASR agreement is expected to occur no later than the third fiscal quarter of the Company’s Fiscal 2025. During 2024, the Company invested $4,194 to repurchase 68.4 million Kroger common shares at an average price of $61.31 per share, which includes excise taxes related to the shares repurchased. These shares were reacquired under the December 2024 Repurchase Program and the 1999 Repurchase Program. During 2023, the Company invested $62 to repurchase 1.3 million Kroger common shares at an average price of $46.98 per share. These shares were reacquired under the 1999 Repurchase Program. During 2022, the Company invested $993 to repurchase 19.4 million Kroger common shares at an average price of $51.29 per share. These shares were reacquired under the December 2021 Repurchase Program and the 1999 Repurchase Program. As of February 1, 2025, there was $2,500 remaining under the December 2024 Repurchase Program, which reflects the reduction of the unsettled accelerated share repurchases of $1,000 and excludes excise tax on share repurchases in excess of issuances. Amounts available under the 1999 Repurchase Program are dependent upon option exercise activity. The authority remaining under the December 2024 Repurchase Program and the 1999 Repurchase Program do not have an expiration date but may be suspended or terminated by our Board of Directors at any time. |
COMPANY- SPONSORED BENEFIT PLANS |
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COMPANY- SPONSORED BENEFIT PLANS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY- SPONSORED BENEFIT PLANS |
The Company administers non-contributory defined benefit retirement plans for some non-union employees and union-represented employees as determined by the terms and conditions of collective bargaining agreements. These include several qualified pension plans (the “Qualified Plans”) and non-qualified pension plans (the “Non-Qualified Plans”). The Non-Qualified Plans pay benefits to any employee that earns in excess of the maximum allowed for the Qualified Plans by Section 415 of the Internal Revenue Code. The Company only funds obligations under the Qualified Plans. Funding for the company-sponsored pension plans is based on a review of the specific requirements and on evaluation of the assets and liabilities of each plan. In addition to providing pension benefits, the Company provides certain health care benefits for retired employees. Based on an employee’s age, years of service and position with the Company, the employee may be eligible for retiree health care benefits. Funding of retiree health care benefits occurs as claims or premiums are paid. The Company recognizes the funded status of its retirement plans on the Consolidated Balance Sheets. Actuarial gains or losses and prior service credits that have not yet been recognized as part of net periodic benefit cost are required to be recorded as a component of AOCI. The Company has elected to measure defined benefit plan assets and obligations as of January 31, which is the month-end that is closest to its fiscal year-ends. Amounts recognized in AOCI as of February 1, 2025 and February 3, 2024 consist of the following (pre-tax):
Other changes recognized in other comprehensive income (loss) in 2024, 2023 and 2022 were as follows (pre-tax):
Information with respect to change in benefit obligation, change in plan assets, the funded status of the plans recorded in the Consolidated Balance Sheets, net amounts recognized at the end of fiscal years, weighted-average assumptions and components of net periodic benefit cost follow:
As of February 1, 2025, other assets and other current liabilities include $24 and $36, respectively, of the net asset and liability recognized for the above benefit plans. As of February 3, 2024, other assets and other current liabilities include $44 and $36, respectively, of the net asset and liability recognized for the above benefit plans. Pension plan assets do not include common shares of The Kroger Co. The following table outlines the weighted average assumptions associated with pension and other benefit costs for 2024, 2023 and 2022:
The Company’s discount rate assumptions were intended to reflect the rates at which the pension benefits could be effectively settled. They take into account the timing and amount of benefits that would be available under the plans. The Company’s policy is to match the plan’s cash flows to that of a hypothetical bond portfolio whose cash flow from coupons and maturities match the plan’s projected benefit cash flows. The discount rates are the single rates that produce the same present value of cash flows. The selection of the 5.60% and 5.54% discount rates as of year-end 2024 for pension and other benefits, respectively, represents the hypothetical bond portfolio using bonds with an AA or better rating constructed with the assistance of an outside consultant. The Company’s assumed pension plan investment return rate was 5.50% in 2024, 2023, and 2022. The value of all investments in the company-sponsored defined benefit pension plans during the calendar year ended December 31, 2024, net of investment management fees and expenses, increased 0.7% and for fiscal year 2024 investments increased 1.7%. Historically, the Company’s pension plans’ average rate of return was 4.0% for the 10 calendar years ended December 31, 2024, net of all investment management fees and expenses. For the past 20 years, the Company’s pension plans’ average annual rate of return has been 5.8%. To determine the expected rate of return on pension plan assets held by the Company, the Company considers current and forecasted plan asset allocations as well as historical and forecasted rates of return on various asset categories. The Company calculates its expected return on plan assets by using the market-related value of plan assets. The market-related value of plan assets is determined by adjusting the actual fair value of plan assets for gains or losses on plan assets. Gains or losses represent the difference between actual and expected returns on plan investments for each plan year. Gains or losses on plan assets are recognized evenly over a five-year period. Using a different method to calculate the market-related value of plan assets would provide a different expected return on plan assets. The pension benefit unfunded status increased in 2024, compared to 2023, due primarily to the qualified plans’ actual return on plan assets being less than the expected rate of return on plan assets, partially offset by an increase in discount rates, which lowered the benefit obligation. The Company’s Qualified Plans were fully funded as of February 1, 2025 and February 3, 2024. The following table provides the components of the Company’s net periodic benefit costs for 2024, 2023 and 2022:
The following table provides the projected benefit obligation (“PBO”) and the fair value of plan assets for those company-sponsored pension plans with projected benefit obligations in excess of plan assets:
The following table provides the accumulated benefit obligation (“ABO”) and the fair value of plan assets for those company-sponsored pension plans with accumulated benefit obligations in excess of plan assets:
The following table provides information about the Company’s estimated future benefit payments:
The following table provides information about the target and actual pension plan asset allocations as of February 1, 2025:
Investment objectives, policies and strategies are set by the Retirement Benefit Plan Management Committee (the “Committee”). The primary objectives include holding and investing the assets and distributing benefits to participants and beneficiaries of the pension plans. Investment objectives have been established based on a comprehensive review of the capital markets and each underlying plan’s current and projected financial requirements. The time horizon of the investment objectives is long-term in nature and plan assets are managed on a going-concern basis. Investment objectives and guidelines specifically applicable to each manager of assets are established and reviewed annually. Derivative instruments may be used for specified purposes, including rebalancing exposures to certain asset classes. Any use of derivative instruments for a purpose or in a manner not specifically authorized is prohibited, unless approved in advance by the Committee. The target allocations shown for 2024 were established at the beginning of 2024 based on the Company’s liability-driven investment (“LDI”) strategy. An LDI strategy focuses on maintaining a close to fully-funded status over the long-term with minimal funded status risk. This is achieved by investing more of the plan assets in fixed income instruments to more closely match the duration of the plan liability. The Company did not make any significant contributions to its company-sponsored pension plans in 2024, and the Company is not required to make any contributions to these plans in 2025. If the Company does make any contributions in 2025, the Company expects these contributions will decrease its required contributions in future years. Among other things, investment performance of plan assets, the interest rates required to be used to calculate the pension obligations and future changes in legislation, will determine the amounts of any contributions. The Company expects 2025 net periodic benefit costs for company-sponsored pension plans to be approximately $13. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. The Company used a 6.60% initial health care cost trend rate, which is assumed to decrease on a linear basis to a 4.00% ultimate health care cost trend rate in 2046, to determine its expense. The following tables, set forth by level within the fair value hierarchy, present the Qualified Plans’ assets at fair value as of February 1, 2025 and February 3, 2024: Assets at Fair Value as of February 1, 2025
Assets at Fair Value as of February 3, 2024
Certain investments that are measured at fair value using the NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented for these investments in the preceding tables are intended to permit reconciliation of the fair value hierarchies to the total fair value of plan assets. For measurements using significant unobservable inputs (Level 3) during 2024 and 2023, a reconciliation of the beginning and ending balances is as follows:
See Note 7 for a discussion of the levels of the fair value hierarchy. The assets’ fair value measurement level above is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of the valuation methods used for the Qualified Plans’ assets measured at fair value in the above tables:
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement. The Company contributed and expensed $328, $322 and $315 to employee 401(k) retirement savings accounts in 2024, 2023 and 2022, respectively. The 401(k) retirement savings account plans provide to eligible employees both matching contributions and automatic contributions from the Company based on participant contributions, compensation as defined by the plan and length of service. |
MULTI-EMPLOYER PENSION PLANS |
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MULTI-EMPLOYER PENSION PLANS |
The Company contributes to various multi-employer pension plans based on obligations arising from collective bargaining agreements. These multi-employer pension plans provide retirement benefits to participants based on their service to contributing employers. The benefits are paid from assets held in trust for that purpose. Trustees are appointed in equal number by employers and unions. The trustees typically are responsible for determining the level of benefits to be provided to participants as well as for such matters as the investment of the assets and the administration of the plans. The Company recognizes expense in connection with these plans as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. The Company made cash contributions to these plans of $398 in 2024, $635 in 2023 and $620 in 2022. The decrease in 2024, compared to 2023 and 2022, is due to the fulfillment of contractually obligated payments related to the Company’s commitments established when restructuring the United Food and Commercial Workers International Union-Industry Variable Annuity Pension Plan agreement. The Company continues to evaluate and address potential exposure to under-funded multi-employer pension plans as it relates to the Company’s associates who are beneficiaries of these plans. These under-fundings are not a liability of the Company. When an opportunity arises that is economically feasible and beneficial to the Company and its associates, the Company may negotiate the restructuring of under-funded multi-employer pension plan obligations to help stabilize associates’ future benefits and become the fiduciary of the restructured multi-employer pension plan. The commitments from these restructurings do not change the Company’s debt profile as it relates to its credit rating since these off-balance sheet commitments are typically considered in the Company’s investment grade debt rating. The Company is currently designated as the named fiduciary of the United Food and Commercial Workers (“UFCW”) Consolidated Pension Plan and the International Brotherhood of Teamsters (“IBT”) Consolidated Pension Fund and has sole investment authority over these assets. Due to opportunities arising, the Company has restructured certain multi-employer pension plans. The significant effects of these restructuring agreements recorded in our Consolidated Financial Statements are:
The risks of participating in multi-employer pension plans are different from the risks of participating in single-employer pension plans in the following respects:
The Company’s participation in multi-employer plans is outlined in the following tables. The EIN / Pension Plan Number column provides the Employer Identification Number (“EIN”) and the three-digit pension plan number. The most recent Pension Protection Act Zone Status available in 2024 and 2023 is for the plan’s year-end at December 31, 2023 and December 31, 2022, respectively. Among other factors, generally, plans in the red zone are less than 65 percent funded, plans in the yellow zone are less than 80 percent funded and plans in the green zone are at least 80 percent funded. The FIP/RP Status Pending / Implemented Column indicates plans for which a funding improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented. Unless otherwise noted, the information for these tables was obtained from the Forms 5500 filed for each plan’s year-end at December 31, 2023 and December 31, 2022. The multi-employer contributions listed in the table below are the Company’s multi-employer contributions made in fiscal years 2024, 2023 and 2022. The following table contains information about the Company’s multi-employer pension plans:
The following table describes (a) the expiration date of the Company’s collective bargaining agreements and (b) the expiration date of the Company’s most significant collective bargaining agreements for each of the material multi-employer funds in which the Company participates:
Based on the most recent information available to it, the Company believes the present value of actuarial accrued liabilities in most of these multi-employer plans exceeds the value of the assets held in trust to pay benefits. Moreover, if the Company were to exit certain markets or otherwise cease making contributions to these funds, the Company could trigger a withdrawal liability. Any adjustment for withdrawal liability will be recorded when it is probable that a liability exists and it can be reasonably estimated. The Company also contributes to various other multi-employer benefit plans that provide health and welfare benefits to active and retired participants. Total contributions made by the Company to these other multi-employer health and welfare plans were approximately $1,228 in 2024, $1,182 in 2023 and $1,129 in 2022. |
SEGMENT REPORTING |
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SEGMENT REPORTING | 16. SEGMENT REPORTING The Company operates supermarkets, multi-department stores and fulfillment centers throughout the United States. The Company’s retail operations, which represent 98% of the Company’s consolidated sales, are its only reportable segment. The retail operations’ segment revenues are predominately earned as consumer products are sold to customers in our stores, fuel centers and via the Company’s online platforms. The Company aggregates its operating divisions into one reportable segment due to the operating divisions having similar economic characteristics with similar long-term financial performance. In addition, the Company’s operating divisions offer customers similar products, have similar distribution methods, operate in similar regulatory environments, purchase the majority of the merchandise for retail sale from similar (and in many cases identical) vendors on a coordinated basis from a centralized location, serve similar types of customers, and are allocated capital from a centralized location. Operating divisions are organized primarily on a geographical basis so the operating division management team can be responsive to local needs of the operating division and can execute company strategic plans and initiatives throughout the locations in their operating division. This geographical separation is the primary differentiation between these retail operating divisions. The geographical basis of organization reflects how the business is managed and how the Company’s Chief Executive Officer, who acts as the Company’s chief operating decision maker (“CODM”), assesses performance internally. All of the Company’s operations are domestic. The accounting policies of the retail operations segment are the same as those described in the summary of significant accounting policies in Note 1 to the Consolidated Financial Statements. The Company’s CODM assesses performance and allocates resources for the retail operations segment using segment FIFO earnings before net interest expense, income tax expense and depreciation and amortization (“EBITDA”). The Company defines FIFO EBITDA as EBITDA excluding the LIFO charge. The Company’s CODM also uses segment FIFO EBITDA to measure the operational effectiveness of the Company’s financial model, compare the performance of core operating results between periods, against budget and against competitors and evaluate whether to invest capital in the retail operations segment or in other parts of the Company, such as for share repurchases or dividend payments. The Company’s CODM is not provided asset information by reportable segment as asset information is provided to the CODM on a consolidated basis. The following table presents the Company’s retail operations segment revenue, measure of segment profit or loss, significant segment expenses and reconciliation of retail operations segment FIFO EBITDA to consolidated net earnings before income tax expense and retail operations segment sales to consolidated sales for the fiscal years ended February 1, 2025, February 3, 2024 and January 28, 2023:
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SALE OF KROGER SPECIALTY PHARMACY |
12 Months Ended |
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Feb. 01, 2025 | |
SALE OF KROGER SPECIALTY PHARMACY | |
SALE OF KROGER SPECIALTY PHARMACY | 17. SALE OF KROGER SPECIALTY PHARMACY On October 4, 2024, the Company completed the sale of its Kroger Specialty Pharmacy business to Elevance Health, for $464. In 2024, the Company recognized a gain on sale for $79, $91 net of tax, which includes the reduction to income tax expense of $31 related to recognizing deferred tax assets for the divested entity. |
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. |
12 Months Ended | ||
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Feb. 01, 2025 | |||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | |||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. |
As previously disclosed, on October 13, 2022, the Company entered into a merger agreement (the “Merger Agreement”) with Albertsons Companies, Inc. (“Albertsons”) pursuant to which all of the outstanding shares of Albertsons common and preferred stock (on an as converted basis) automatically would have been converted into the right to receive $34.10 per share, subject to certain reductions following a $6.85 per share pre-closing cash dividend that was paid on January 20, 2023 to Albertsons shareholders of record as of October 24, 2022. The adjusted per share cash purchase price was expected to be $27.25. On February 26, 2024, the Federal Trade Commission (“FTC”) instituted an administrative proceeding to prohibit the merger. Simultaneously, the FTC (joined by nine States) filed suit in the United States District Court for the District of Oregon (the “FTC Federal Litigation”) requesting a preliminary injunction to block the merger. On December 10, 2024, pursuant to a decision of United States District Court for the District of Oregon in the case Federal Trade Commission et al. v. The Kroger Company and Albertsons Companies, Inc. (Case No.: 3:24-cv-00347-AN), the court issued a preliminary injunction enjoining the consummation of the merger. On January 15, 2024, and February 14, 2024, the attorneys general of Washington and Colorado, respectively, filed suit in their respective state courts, also seeking to enjoin the merger. On December 10, 2024, the Washington court also issued a permanent injunction blocking the merger in the Washington case. On March 5, 2025, the Colorado court dismissed the claim seeking to enjoin the merger as moot. A second claim related to an alleged no-poach agreement between Kroger and Albertsons remains pending in Colorado. In addition to these governmental actions, private plaintiffs have filed suit in the United States District Court for the Northern District of California also seeking to enjoin the transaction. That case was dismissed with prejudice on February 3, 2025, and plaintiffs have appealed. On December 11, 2024, the Company delivered a notice to Albertsons terminating the merger agreement (the “Termination Notice”). The Termination Notice further notified Albertsons that a prior termination letter sent by Albertsons to Kroger on December 10, 2024 was not an effective termination. In connection with the Termination Notice, Kroger notified Albertsons that Kroger has no obligation to pay the Parent Termination Fee (as defined in the Merger Agreement) because Albertsons failed to perform and comply in all material respects with its covenants under the Merger Agreement. On December 10, 2024, Albertsons sued the Company in the Delaware Court of Chancery for alleged breaches of the Merger Agreement and the implied covenant of good faith and fair dealing. Albertsons seeks payment of a $600 termination fee that Albertsons alleges it is owed under the Merger Agreement, as well as additional damages, including expenses paid by Albertsons in connection with the Merger and the lost premium Albertsons alleges is owed to its shareholders, as well as other relief. On March 17, 2025, the Company filed an answer denying the allegations in Albertsons’s complaint, and also filed counterclaims that seek recovery for breaches of the Merger Agreement by Albertsons. In connection with obtaining the requisite regulatory clearance necessary to consummate the Albertsons transaction, the Company and Albertsons entered into a comprehensive divestiture plan with C&S Wholesale Grocers, LLC (“C&S”) on September 8, 2023, which was further amended on April 22, 2024, to provide for the divestiture of stores, facilities, agreements, banners, private label brands and certain other rights. The definitive amended and restated agreement was subject to fulfillment of customary closing conditions, including clearance by the FTC. Following the termination of the merger with Albertsons, the Company terminated the amended and restated purchase agreement with C&S. In connection with the merger agreement, on October 13, 2022, the Company entered into a commitment letter with certain lenders pursuant to which the lenders committed to provide a $17,400 senior unsecured bridge term loan facility, which, if entered into, would have matured 364 days after the closing date of the merger. The commitments were intended to be drawn to finance the merger with Albertsons only to the extent the Company did not arrange for alternative financing prior to closing. As alternative financing for the merger was secured, the commitments with respect to the bridge term loan facility under the commitment letter were reduced. The entry into the term loan credit agreement mentioned below reduced the commitments under the Company’s $17,400 bridge facility commitment by $4,750 to $12,650. On April 12, 2024, the Company and the lenders to the bridge facility, at the Company’s request, further reduced the bridge facility commitment by $2,000 to $10,650. During the third quarter of 2024, the Company terminated the bridge term loan facility due to issuing $10,500 of senior notes mentioned below, net proceeds of which were expected to partially fund the cash consideration for the proposed merger and for general corporate purposes. Fees with respect to the bridge term loan facility are included in “Other” in the Company’s Consolidated Statements of Cash Flows within “Cash Flows from Financing Activities” and were recognized as operating, general and administrative expense in the Company’s Consolidated Statements of Operations over the commitment period. On November 9, 2022, the Company executed a term loan credit agreement with certain lenders pursuant to which the lenders committed to provide, contingent upon the completion of the merger with Albertsons and certain other customary conditions to funding, (1) senior unsecured term loans in an aggregate principal amount of $3,000 maturing on the third anniversary of the merger closing date and (2) senior unsecured term loans in an aggregate principal amount of $1,750 maturing on the date that is 18 months after the merger closing date (collectively, the “Term Loan Facilities”). Borrowings under the Term Loan Facilities were to be used to pay a portion of the consideration and other amounts payable in connection with the merger with Albertsons. In 2024, the Company entered into a second amendment to the term loan agreement to, among other things, amend certain covenants applicable thereto. Concurrently with the termination of the Merger Agreement on December 11, 2024, all of the commitments with respect to the Term Loan Facilities were automatically terminated in accordance with the terms thereof. On August 20, 2024, the Company issued $1,000 of its 4.70% Senior Notes due 2026 (the “2026 notes”); $1,000 of its 4.60% Senior Notes due 2027 (the “2027 notes”); $1,400 of its 4.65% Senior Notes due 2029 (the “2029 notes”); $1,300 of its 4.90% Senior Notes due 2031 (the “2031 notes”); $2,200 of its 5.00% Senior Notes due 2034 (the “2034 notes”); $2,100 of its 5.50% Senior Notes due 2054 (the “2054 notes”); and $1,500 of its 5.65% Senior Notes due 2064 (the “2064 notes”) to pay a portion of the cash consideration for its proposed merger with Albertsons and general corporate purposes. The 2026 notes, 2027 notes, 2029 notes and the 2031 notes (collectively, the “SMR Notes”) were subject to a special mandatory redemption if the proposed merger was terminated or did not close by an agreed upon date. In connection with the termination of the Merger Agreement, the Company redeemed the SMR Notes on December 18, 2024 at a redemption price equal to 101% of the principal amount, plus accrued and unpaid interest to, but excluding, December 18, 2024. The 2034 notes, the 2054 notes and the 2064 notes remain outstanding. On August 15, 2024, the Company commenced an exchange offer for any and all outstanding notes (the “ACI Notes”) issued by Albertsons and certain of its subsidiaries for up to approximately $7,442 aggregate principal amount of new senior notes to be issued by the Company and cash. In conjunction with the exchange offers (the “Exchange Offers”), the Company concurrently solicited consents (collectively, the “Consent Solicitations”) to adopt certain proposed amendments (the “Proposed Amendments”) to each of the indentures (each an “ACI Indenture” and, collectively, the “ACI Indentures”) governing the ACI Notes. In connection with the termination of the Merger Agreement, on December 11, 2024, the Company terminated the Exchange Offers and Consent Solicitations.
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RECENTLY ADOPTED ACCOUNTING STANDARDS |
12 Months Ended |
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Feb. 01, 2025 | |
RECENTLY ADOPTED ACCOUNTING STANDARDS | |
RECENTLY ADOPTED ACCOUNTING STANDARDS | 19. RECENTLY ADOPTED ACCOUNTING STANDARDS In November 2023, the FASB issued ASU No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure.” The ASU updated reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The Company adopted ASU No. 2023-07 during the year ended February 1, 2025. See Note 16 "Segment Reporting" in the accompanying Notes to the Consolidated Financial Statements for additional information.
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RECENTLY ISSUED ACCOUNTING STANDARDS |
12 Months Ended |
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Feb. 01, 2025 | |
RECENTLY ISSUED ACCOUNTING STANDARDS | |
RECENTLY ISSUED ACCOUNTING STANDARDS | 20. RECENTLY ISSUED ACCOUNTING STANDARDS In November 2024, the FASB issued ASU 2024-03 and in January 2025, the FASB issued ASU 2025-01, “Income Statement - Reporting Comprehensive Income -Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The guidance requires disclosures about specific expense categories, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. The ASU is effective in the first annual reporting period beginning after December 15, 2026, and for interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements. In December 2023, the FASB issued ASU No. 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This guidance amends existing income tax disclosure guidance, primarily requiring more detailed disclosure for income taxes paid and the effective tax rate reconciliation. The ASU is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted and can be applied on either a prospective or retroactive basis. The Company is currently assessing the effect that adoption of this guidance will have on its Consolidated Financial Statements. |
Pay vs Performance Disclosure - USD ($) $ in Millions |
12 Months Ended | ||
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Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
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Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 2,665 | $ 2,164 | $ 2,244 |
Insider Trading Arrangements |
3 Months Ended |
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Feb. 01, 2025 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Insider Trading Policies and Procedures |
12 Months Ended |
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Feb. 01, 2025 | |
Insider Trading Policies and Procedures [Line Items] | |
Insider Trading Policies and Procedures Adopted | true |
Cybersecurity Risk Management and Strategy Disclosure |
12 Months Ended |
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Feb. 01, 2025 | |
Cybersecurity Risk Management, Strategy, and Governance [Line Items] | |
Cybersecurity Risk Management Processes for Assessing, Identifying, and Managing Threats [Text Block] | RISK MANAGEMENT AND STRATEGY Securing Kroger’s business information, intellectual property, customer and employee data and technology systems is essential for the continuity of our businesses, meeting applicable regulatory requirements and maintaining the trust of our stakeholders. We have adopted enterprise cybersecurity risk mitigation and governance processes, which are set forth in the Kroger Cybersecurity Risk Management program (“CRM”), the Kroger Third-Party Cybersecurity Risk Management (“TPCRM”) program and the Kroger Cyber Incident Response Plan (“IR Plan”). Our approach is guided by the principles of the CRM, which includes monitoring threats and vulnerabilities and assessing and monitoring related controls, supporting the Corporate Information Security function, the Chief Information Security Officer (“CISO”) and Chief Digital Officer (“CDO”). Kroger’s cybersecurity policies, standards, processes, and practices are integrated into our overarching risk management system in an effort to enhance our ability to safeguard our operations and information, which includes quarterly cybersecurity reporting to the Board, delivered by senior leadership. Kroger Cyber Risk Management Program The CRM was developed in collaboration with third-party consultants and is aligned with the National Institute of Standards and Technology (“NIST”), Risk Management Framework (“RMF”), Cybersecurity Framework (“CSF”) and the International Organization for Standardization 27001 (“ISO 27001”). The program includes security and privacy, risk-based controls, and incorporates lessons learned from cybersecurity incidents. Under Kroger’s CRM, cyber risks, including cyber threats and cyber events/incidents, are assessed, treated, and monitored on a continuous basis. We integrate lessons learned from incident response and cyber risk mitigation into our cyber risk management strategy, in an effort to improve overall cybersecurity on an ongoing basis. Kroger's CRM program is spearheaded by specific management positions, chosen for their expertise in the field as further discussed below. In line with cyber risk management best practices, we have collaborated with recognized third-party experts as needed to align the CRM’s foundational processes, metrics, monitoring, and reporting with common frameworks such as the NIST RMF and the NIST CSF. Third-Party Cyber Risk Management Recognizing the potential vulnerabilities posed by third-party relationships, Kroger has implemented a comprehensive TPCRM program. The TPCRM program is designed to assess third-party cybersecurity risks by employing third-party cyber risk assessments, vendor tiering, and a dedicated team tasked with recommending holistic improvements to strengthen Kroger’s cybersecurity posture, sourcing, and contracting processes. Kroger’s Information Security Operations Center (“iSOC”) responds to known third-party incidents on a continuous basis. The iSOC is a part of the Corporate Information Security (“CIS”) department and is responsible for detecting, responding to, and escalating security incidents. We partner directly with business stakeholders and technology custodians to determine an appropriate response to manage incident risk to minimize the effect to the business. This response process is a regular and critical function of the iSOC and is defined in a separate appendix to the IR Plan. Any material risk identified from these incidents is escalated and communicated using formal severity and impact criteria as defined in the IR Plan. Kroger Cyber Incident Response Plan The IR Plan documents the processes by which information security events are detected, identified, prioritized, and analyzed. The Kroger iSOC, CISO, legal counsel, and corporate affairs stakeholders are then engaged depending on the incident’s scope, business effect, and potential material risk. This cross-functional team is responsible for assessing an appropriate response and mitigation pathway. Once security events are identified through the enterprise detection and monitoring ecosystem, the IR Plan sets forth an incident prioritization/decision workflow to determine scope, business effect, and potential material risk. This workflow is implemented through collaboration with the iSOC, CISO, legal counsel, and corporate affairs stakeholders and correlates to industry standard severity levels. In addition to the processes outlined above, we have also implemented an information security training program for employees that includes security awareness training related to cyber security risks, simulated phishing emails and regular communication to the enterprise regarding cyber security risks. We experience cybersecurity threats and incidents from time to time. We are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, our financial condition, results of operations or cash flows, and we have not experienced a cybersecurity threat or incident that has materially affected Kroger in at least the last three years. There can be no assurance that cybersecurity threats will not have a material effect on us, including our business strategy, our financial condition, results of operations or cash flows. Please see “Item 1A. Risk Factors” for more information on our cybersecurity-related risks. |
Cybersecurity Risk Management Processes Integrated [Flag] | true |
Cybersecurity Risk Management Processes Integrated [Text Block] | Securing Kroger’s business information, intellectual property, customer and employee data and technology systems is essential for the continuity of our businesses, meeting applicable regulatory requirements and maintaining the trust of our stakeholders. We have adopted enterprise cybersecurity risk mitigation and governance processes, which are set forth in the Kroger Cybersecurity Risk Management program (“CRM”), the Kroger Third-Party Cybersecurity Risk Management (“TPCRM”) program and the Kroger Cyber Incident Response Plan (“IR Plan”). Our approach is guided by the principles of the CRM, which includes monitoring threats and vulnerabilities and assessing and monitoring related controls, supporting the Corporate Information Security function, the Chief Information Security Officer (“CISO”) and Chief Digital Officer (“CDO”). Kroger’s cybersecurity policies, standards, processes, and practices are integrated into our overarching risk management system in an effort to enhance our ability to safeguard our operations and information, which includes quarterly cybersecurity reporting to the Board, delivered by senior leadership. Kroger Cyber Risk Management Program The CRM was developed in collaboration with third-party consultants and is aligned with the National Institute of Standards and Technology (“NIST”), Risk Management Framework (“RMF”), Cybersecurity Framework (“CSF”) and the International Organization for Standardization 27001 (“ISO 27001”). The program includes security and privacy, risk-based controls, and incorporates lessons learned from cybersecurity incidents. Under Kroger’s CRM, cyber risks, including cyber threats and cyber events/incidents, are assessed, treated, and monitored on a continuous basis. We integrate lessons learned from incident response and cyber risk mitigation into our cyber risk management strategy, in an effort to improve overall cybersecurity on an ongoing basis. Kroger's CRM program is spearheaded by specific management positions, chosen for their expertise in the field as further discussed below. In line with cyber risk management best practices, we have collaborated with recognized third-party experts as needed to align the CRM’s foundational processes, metrics, monitoring, and reporting with common frameworks such as the NIST RMF and the NIST CSF. Third-Party Cyber Risk Management Recognizing the potential vulnerabilities posed by third-party relationships, Kroger has implemented a comprehensive TPCRM program. The TPCRM program is designed to assess third-party cybersecurity risks by employing third-party cyber risk assessments, vendor tiering, and a dedicated team tasked with recommending holistic improvements to strengthen Kroger’s cybersecurity posture, sourcing, and contracting processes. Kroger’s Information Security Operations Center (“iSOC”) responds to known third-party incidents on a continuous basis. The iSOC is a part of the Corporate Information Security (“CIS”) department and is responsible for detecting, responding to, and escalating security incidents. We partner directly with business stakeholders and technology custodians to determine an appropriate response to manage incident risk to minimize the effect to the business. This response process is a regular and critical function of the iSOC and is defined in a separate appendix to the IR Plan. Any material risk identified from these incidents is escalated and communicated using formal severity and impact criteria as defined in the IR Plan. Kroger Cyber Incident Response Plan The IR Plan documents the processes by which information security events are detected, identified, prioritized, and analyzed. The Kroger iSOC, CISO, legal counsel, and corporate affairs stakeholders are then engaged depending on the incident’s scope, business effect, and potential material risk. This cross-functional team is responsible for assessing an appropriate response and mitigation pathway. Once security events are identified through the enterprise detection and monitoring ecosystem, the IR Plan sets forth an incident prioritization/decision workflow to determine scope, business effect, and potential material risk. This workflow is implemented through collaboration with the iSOC, CISO, legal counsel, and corporate affairs stakeholders and correlates to industry standard severity levels. In addition to the processes outlined above, we have also implemented an information security training program for employees that includes security awareness training related to cyber security risks, simulated phishing emails and regular communication to the enterprise regarding cyber security risks. We experience cybersecurity threats and incidents from time to time. We are not aware of any material risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, our financial condition, results of operations or cash flows, and we have not experienced a cybersecurity threat or incident that has materially affected Kroger in at least the last three years. There can be no assurance that cybersecurity threats will not have a material effect on us, including our business strategy, our financial condition, results of operations or cash flows. Please see “Item 1A. Risk Factors” for more information on our cybersecurity-related risks. |
Cybersecurity Risk Management Third Party Engaged [Flag] | true |
Cybersecurity Risk Third Party Oversight and Identification Processes [Flag] | true |
Cybersecurity Risk Materially Affected or Reasonably Likely to Materially Affect Registrant [Flag] | false |
Cybersecurity Risk Board of Directors Oversight [Text Block] | GOVERNANCE Protection of our customers’ data is a fundamental priority for our Board and management team. Our risk management team is integrated into our CIS function and is led by our CDO and CISO. The risk management team reports to the CISO and has combined experience in information security, governance, and compliance, including domains such as engineering, architecture, cybersecurity, and privacy. This team is responsible for defining the program, cybersecurity governance, and gathering insights related to assessing, identifying, and managing cybersecurity threat risks, their severity, and mitigations. Kroger’s CDO reports to the CEO and leads technology and digital capabilities for the Kroger Co., including the overall cybersecurity strategy. Kroger’s CDO has over 20 years of both leading and transforming technology, digital growth, and e-commerce in the retail and food industry. He graduated with a master’s degree in business administration and management from Ecole Supérieure de Commerce de Chambéry, Rhône-Alpes, France. Kroger’s interim CISO brings nearly 20 years of experience developing and leading security and risk programs. His experience includes governance, information security, and threat management. He graduated from Miami University with a bachelor’s degree in management information systems and marketing. The Audit Committee of Kroger’s Board of Directors is charged with oversight of data privacy and cybersecurity risks. Kroger’s CDO and CISO provide quarterly updates on cybersecurity risks and related mitigating actions to the Audit Committee, meet with the full Board at least annually and inform the Audit Committee immediately if a cybersecurity incident is deemed material. They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. Additionally, the CDO and CISO discuss and present strategies to address geopolitical threats that may affect operations as well as technological changes, such as AI and quantum computing. In overseeing cybersecurity risks, the Audit Committee focuses on aggregated, thematic issues with a risk-based approach. Oversight of cybersecurity risk incorporates strategy metrics, third-party assessments, and internal audit and controls. An independent third party also regularly reports to the Audit Committee and the full Board on cybersecurity, and outside counsel advises the Board on best practices for cybersecurity oversight by the Board, and the evolution of that oversight over time. Management also reports on strategic key risk indicators, ongoing initiatives, and significant incidents and their effect. |
Cybersecurity Risk Board Committee or Subcommittee Responsible for Oversight [Text Block] | Audit Committee |
Cybersecurity Risk Process for Informing Board Committee or Subcommittee Responsible for Oversight [Text Block] | The Audit Committee of Kroger’s Board of Directors is charged with oversight of data privacy and cybersecurity risks. Kroger’s CDO and CISO provide quarterly updates on cybersecurity risks and related mitigating actions to the Audit Committee, meet with the full Board at least annually and inform the Audit Committee immediately if a cybersecurity incident is deemed material. They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. Additionally, the CDO and CISO discuss and present strategies to address geopolitical threats that may affect operations as well as technological changes, such as AI and quantum computing. |
Cybersecurity Risk Role of Management [Text Block] | Our risk management team is integrated into our CIS function and is led by our CDO and CISO. The risk management team reports to the CISO and has combined experience in information security, governance, and compliance, including domains such as engineering, architecture, cybersecurity, and privacy. This team is responsible for defining the program, cybersecurity governance, and gathering insights related to assessing, identifying, and managing cybersecurity threat risks, their severity, and mitigations. |
Cybersecurity Risk Management Positions or Committees Responsible [Flag] | true |
Cybersecurity Risk Management Positions or Committees Responsible [Text Block] | CDO and CISO |
Cybersecurity Risk Management Expertise of Management Responsible [Text Block] | Kroger’s CDO has over 20 years of both leading and transforming technology, digital growth, and e-commerce in the retail and food industry. He graduated with a master’s degree in business administration and management from Ecole Supérieure de Commerce de Chambéry, Rhône-Alpes, France. Kroger’s interim CISO brings nearly 20 years of experience developing and leading security and risk programs. His experience includes governance, information security, and threat management. He graduated from Miami University with a bachelor’s degree in management information systems and marketing. |
Cybersecurity Risk Process for Informing Management or Committees Responsible [Text Block] | They report to the Audit Committee and the Board on compliance and regulatory issues, provide updates concerning continuously-evolving threats and mitigating actions, and present a NIST Cybersecurity Framework Scorecard. |
Cybersecurity Risk Management Positions or Committees Responsible Report to Board [Flag] | true |
ACCOUNTING POLICIES (Policies) |
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Description of Business, Basis of Presentation and Principles of Consolidation | Description of Business, Basis of Presentation and Principles of Consolidation The Kroger Co. (the “Company”) was founded in 1883 and incorporated in 1902. The Company is a food and drug retailer that operates 2,731 supermarkets, 2,273 pharmacies and 1,702 fuel centers in 35 states and the District of Columbia while also operating online through a digital ecosystem to offer customers an omnichannel shopping experience. The Company also manufactures and processes food for sale by its supermarkets and online. The accompanying financial statements include the consolidated accounts of the Company, its wholly-owned subsidiaries and other consolidated entities. Intercompany transactions and balances have been eliminated. |
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Fiscal Year | Fiscal Year The Company’s fiscal year ends on the Saturday nearest January 31. The last three fiscal years consist of the -week period ended February 1, 2025, the -week period ended February 3, 2024 and the 52-week period ended January 28, 2023. |
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Pervasiveness of Estimates | Pervasiveness of Estimates The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities. Disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of consolidated revenues and expenses during the reporting period is also required. Actual results could differ from those estimates. |
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Cash, Temporary Cash Investments and Book Overdrafts | Cash, Temporary Cash Investments and Book Overdrafts Cash and temporary cash investments represent store cash and short-term investments with original maturities of less than three months. Book overdrafts are included in “Accounts payable” and “Accrued salaries and wages” in the Consolidated Balance Sheets.
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Deposits In-Transit | Deposits In-Transit Deposits in-transit generally represent funds deposited to the Company’s bank accounts at the end of the year related to sales, a majority of which were paid for with debit cards, credit cards and checks, to which the Company does not have immediate access but settle within a few days of the sales transaction. |
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Inventories | Inventories Inventories are stated at the lower of cost (principally on a last-in, first-out “LIFO” basis) or market. In total, approximately 92% of inventories in 2024 and 91% of inventories in 2023 were valued using the LIFO method. The remaining inventories, including substantially all fuel inventories, are stated at the lower of cost (on a FIFO basis) or net realizable value. Replacement cost was higher than the carrying amount by $2,404 at February 1, 2025 and $2,309 at February 3, 2024. The Company follows the Link-Chain, Dollar-Value LIFO method for purposes of calculating its LIFO charge.
The item-cost method of accounting to determine inventory cost before the LIFO adjustment is followed for substantially all store inventories at the Company’s supermarket divisions. This method involves counting each item in inventory, assigning costs to each of these items based on the actual purchase costs (net of vendor allowances and cash discounts) of each item and recording the cost of items sold. The item-cost method of accounting allows for more accurate reporting of periodic inventory balances and enables management to more precisely manage inventory. In addition, substantially all of the Company’s inventory consists of finished goods and is recorded at actual purchase costs (net of vendor allowances and cash discounts). The Company evaluates inventory shortages throughout the year based on actual physical counts in its facilities. Allowances for inventory shortages are recorded based on the results of these counts to provide for estimated shortages as of the financial statement date. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost or, in the case of assets acquired in a business combination, at fair value. Depreciation and amortization expense, which includes the depreciation of assets recorded under finance leases, is computed principally using the straight-line method over the estimated useful lives of individual assets. Buildings and land improvements are depreciated based on lives varying from 10 to 40 years. All new purchases of store equipment are assigned lives varying from to nine years. Leasehold improvements are amortized over the shorter of the lease term to which they relate, which generally varies from to 25 years, or the useful life of the asset. Food production plant, fulfillment center and distribution center equipment is depreciated over lives varying from to 15 years. Information technology assets are generally depreciated over to five years. Depreciation and amortization expense was $3,246 in 2024, $3,125 in 2023 and $2,965 in 2022. Interest costs on significant projects constructed for the Company’s own use are capitalized as part of the costs of the newly constructed facilities. Upon retirement or disposal of assets, the cost and related accumulated depreciation and amortization are removed from the balance sheet and any gain or loss is reflected in net earnings. Refer to Note 3 for further information regarding the Company’s property, plant and equipment. |
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Leases | Leases The Company leases certain store real estate, warehouses, distribution centers, fulfillment centers, office space and equipment. The Company determines if an arrangement is a lease at inception. Finance and operating lease assets and liabilities are recognized at the lease commencement date. Finance and operating lease liabilities represent the present value of minimum lease payments not yet paid. Operating lease assets represent the right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments, lease incentives and impairment, if any. To determine the present value of lease payments, the Company estimates an incremental borrowing rate which represents the rate used for a secured borrowing of a similar term as the lease. Lease terms generally range from 10 to 20 years with options to renew for at the Company’s sole discretion. The lease term includes the initial contractual term as well as any options to extend the lease when it is reasonably certain the Company will exercise that option. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Certain leases include escalation clauses or payment of executory costs such as property taxes, utilities or insurance and maintenance. Operating lease payments are charged on a straight-line basis to rent expense over the lease term and finance lease payments are charged to interest expense and depreciation and amortization expense over the lease term. Assets under finance leases are amortized in accordance with the Company’s normal depreciation policy for owned assets or over the lease term, if shorter. The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants. For additional information on leases, see Note 9 to the Consolidated Financial Statements.
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Goodwill | Goodwill The Company reviews goodwill for impairment during the fourth quarter of each year, or earlier upon the occurrence of a triggering event. The Company performs reviews of each of its operating divisions and other consolidated entities (collectively, “reporting units”) that have goodwill balances. Generally, fair value is determined using a market multiple model, or discounted projected future cash flows, and is compared to the carrying value of a reporting unit for purposes of identifying potential impairment. Projected future cash flows are based on management’s knowledge of the current operating environment and expectations for the future. Goodwill impairment is recognized for any excess of the reporting unit’s carrying value over its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. Results of the goodwill impairment reviews performed during 2024, 2023 and 2022 are summarized in Note 2. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company monitors the carrying value of long-lived assets for potential impairment each quarter based on whether certain triggering events have occurred. These events include current period losses combined with a history of losses or a projection of continuing losses or a significant decrease in the market value of an asset. When a triggering event occurs, an impairment calculation is performed, comparing projected undiscounted future cash flows, utilizing current cash flow information and expected growth rates related to specific stores, to the carrying value for those stores. If the Company identifies impairment for long-lived assets to be held and used, the Company compares the assets’ current carrying value to the assets’ fair value. Fair value is based on current market values or discounted future cash flows. The Company records impairment when the carrying value exceeds fair market value. With respect to owned property and equipment held for disposal, the value of the property and equipment is adjusted to reflect recoverable values based on previous efforts to dispose of similar assets and current economic conditions. Impairment is recognized for the excess of the carrying value over the estimated fair market value, reduced by estimated direct costs of disposal. The Company recorded asset impairments totaling $98 in 2024, which includes $25, $19 net of tax, for property losses. The Company recorded asset impairments in the normal course of business totaling $69 and $68 in 2023 and 2022, respectively. Costs to reduce the carrying value of long-lived assets for each of the years presented have been included in the Consolidated Statements of Operations as Operating, general and administrative (“OG&A”) expense.
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Accounts Payable Financing Arrangement | Accounts Payable Financing Arrangement The Company has an agreement with a third party to provide an accounts payable tracking system which facilitates participating suppliers’ ability to finance payment obligations from the Company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not affected by suppliers’ decisions to finance amounts under this arrangement. The payment term that the Company has with participating suppliers under these programs is approximately 90 days. Outstanding obligations under this financing arrangement are included in “Accounts payable” in the Consolidated Balance Sheets. As of February 1, 2025 and February 3, 2024, the Company had $294 and $325 in “Accounts payable,” respectively, associated with financing arrangements. The following table summarizes the changes in the Company’s outstanding obligations under this financing arrangement through February 1, 2025:
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Contingent Consideration | Contingent Consideration The Company’s Home Chef business combination involved potential payment of future consideration that was contingent upon the achievement of certain performance milestones. The Company recorded contingent consideration at fair value at the date of acquisition based on the consideration expected to be transferred, estimated as the probability-weighted future cash flows, discounted back to present value using a discount rate determined in accordance with accepted valuation methods. The liability for contingent consideration is remeasured to fair value at each reporting period using Level 3 inputs, and the change in fair value, including accretion for the passage of time, is recognized in earnings until the contingency is resolved. In 2022, adjustments to increase the contingent consideration liability as of year-end were recorded for $20 in OG&A expense. The Company made the final contingent consideration payment in 2023, which was based on the fair value of the outstanding year-end 2022 liability. |
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Store Closing Costs | Store Closing Costs The Company regularly evaluates the performance of its stores and periodically closes those stores that are underperforming. Related liabilities arise, such as severance, contractual obligations and other accruals associated with store closings. The Company records a liability for costs associated with an exit or disposal activity when the liability is incurred, usually in the period the store closes. Adjustments to closed store liabilities primarily relate to actual exit costs differing from original estimates. Adjustments are made for changes in estimates in the period in which the change becomes known. Owned stores held for disposal are reduced to their estimated net realizable value. Costs to reduce the carrying values of property, plant, equipment and operating lease assets are accounted for in accordance with the Company’s policy on impairment of long-lived assets. Inventory write-downs, if any, in connection with store closings, are classified in the Consolidated Statements of Operations as “Merchandise costs.” Costs to transfer inventory and equipment from closed stores are expensed as incurred. |
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Interest Rate Risk Management | Interest Rate Risk Management The Company uses derivative instruments primarily to manage its exposure to changes in interest rates. The Company’s current program relative to interest rate protection and the methods by which the Company accounts for its derivative instruments are described in Note 6. |
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Benefit Plans and Multi-Employer Pension Plans | Benefit Plans and Multi-Employer Pension Plans The Company recognizes the funded status of its retirement plans on the Consolidated Balance Sheets. Actuarial gains or losses, prior service costs or credits and transition obligations that have not yet been recognized as part of net periodic benefit cost are required to be recorded as a component of Accumulated Other Comprehensive Income (“AOCI”). The Company has elected to measure defined benefit plan assets and obligations as of January 31, which is the month-end that is closest to its fiscal year-ends. The determination of the obligation and expense for company-sponsored pension plans and other post-retirement benefits is dependent on the selection of assumptions used by actuaries and the Company in calculating those amounts. Those assumptions are described in Note 14 and include, among others, the discount rate, the expected long-term rate of return on plan assets, mortality and the rates of increase in compensation and health care costs. Actual results that differ from the assumptions are accumulated and amortized over future periods and, therefore, generally affect the recognized expense and recorded obligation in future periods. While the Company believes the assumptions are appropriate, significant differences in actual experience or significant changes in assumptions may materially affect the pension and other post-retirement obligations and future expense. The Company also participates in various multi-employer plans for substantially all union employees. Pension expense for these plans is recognized as contributions are funded or when commitments are probable and reasonably estimable, in accordance with GAAP. Refer to Note 15 for additional information regarding the Company’s participation in these various multi-employer pension plans. The Company administers and makes contributions to the employee 401(k) retirement savings accounts. Contributions to the employee 401(k) retirement savings accounts are expensed when contributed or over the service period in the case of automatic contributions. Refer to Note 14 for additional information regarding the Company’s benefit plans. |
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Share Based Compensation | Share Based Compensation The Company recognizes compensation expense for all share-based payments granted under fair value recognition provisions. The Company recognizes share-based compensation expense, net of an estimated forfeiture rate, over the requisite service period of the award based on the fair value at the date of the grant. The Company grants options for common shares (“stock options”) to employees under various plans at an option price equal to the fair market value of the underlying shares on the grant date of the award. Stock options typically expire 10 years from the date of grant. Stock options vest between and four years from the date of grant. In addition to stock options, the Company awards restricted stock to employees and incentive shares to nonemployee directors under various plans. The restrictions on these restricted stock awards generally lapse between and four years from the date of the awards. The Company determines the fair value for restricted stock awards in an amount equal to the fair market value of the underlying shares on the grant date of the award. |
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Deferred Income Taxes | Deferred Income Taxes Deferred income taxes are recorded to reflect the tax consequences of differences between the tax basis of assets and liabilities and their financial reporting basis. Refer to Note 4 for the types of differences that give rise to significant portions of deferred income tax assets and liabilities. |
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Uncertain Tax Positions | Uncertain Tax Positions The Company reviews the tax positions taken or expected to be taken on tax returns to determine whether and to what extent a benefit can be recognized in its consolidated financial statements. Refer to Note 4 for the amount of unrecognized tax benefits and other related disclosures related to uncertain tax positions. Various taxing authorities periodically audit the Company’s income tax returns. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions and the allocation of income to various tax jurisdictions. In evaluating the exposures connected with these various tax filing positions, including state and local taxes, the Company records allowances for probable exposures. A number of years may elapse before a particular matter, for which an allowance has been established, is audited and fully resolved. As of February 1, 2025, the years ended January 31, 2021 and forward remain open for review for federal income tax purposes. The assessment of the Company’s tax position relies on the judgment of management to estimate the exposures associated with the Company’s various filing positions. |
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Self-Insurance Costs | Self-Insurance Costs The Company is primarily self-insured for costs related to workers’ compensation and general liability claims. Liabilities are actuarially determined and are recognized based on claims filed and an estimate of claims incurred but not reported. The liabilities for workers’ compensation claims are accounted for on a present value basis. The Company has purchased stop-loss coverage to limit its exposure to any significant exposure on a per claim basis. The Company is insured for covered costs in excess of these per claim limits. The following table summarizes the changes in the Company’s self-insurance liability through February 1, 2025:
The current portion of the self-insured liability is included in “Other current liabilities,” and the long-term portion is included in “Other long-term liabilities” in the Consolidated Balance Sheets. The Company maintains surety bonds related to self-insured workers’ compensation claims. These bonds are required by most states in which the Company is self-insured for workers’ compensation and are placed with third-party insurance providers to insure payment of the Company’s obligations in the event the Company is unable to meet its claim payment obligations up to its self-insured retention levels. These bonds do not represent liabilities of the Company, as the Company has recorded reserves for the claim costs. The Company also maintains insurance coverages for certain risks, including cyber exposure and property-related losses. The Company’s insurance coverage begins for these exposures ranging from $25 to $30. |
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Revenue Recognition | Revenue Recognition Sales The Company recognizes revenues from the retail sale of products, net of sales taxes, at the point of sale. Pharmacy sales are recorded when the product is provided to the customer. Digital channel-originated sales are recognized either upon pickup in store or upon delivery to the customer. Amounts billed to a customer related to shipping and delivery represent revenues earned for the goods provided and are classified as sales. When shipping is discounted, it is recorded as an adjustment to sales. Discounts provided to customers by the Company at the time of sale, including those provided in connection with loyalty cards, are recognized as a reduction in sales as the products are sold. Discounts provided by vendors, usually in the form of coupons, are not recognized as a reduction in sales provided the coupons are redeemable at any retailer that accepts coupons. The Company records a receivable from the vendor for the difference in sales price and cash received. For merchandise sold in one of the Company’s stores or online, tender is accepted at the point of sale. The Company acts as principal in certain vendor arrangements where the purchase and sale of inventory are virtually simultaneous. The Company records revenue and related costs on a gross basis for these arrangements. For pharmacy sales, collection of third-party receivables is typically expected within three months or less from the time of purchase. The third-party receivables from pharmacy sales are recorded in “Receivables” in the Company’s Consolidated Balance Sheets and were $622 as of February 1, 2025 and $616 as of February 3, 2024. Gift Cards and Gift Certificates The Company does not recognize revenue when it sells its own gift cards and gift certificates (collectively “gift cards”). Rather, it records a deferred revenue liability equal to the amount received. A sale is then recognized when the gift cards are redeemed to purchase the Company’s products. The Company’s gift cards do not expire. While gift cards are generally redeemed within 12 months, some are never fully redeemed. The Company recognizes gift card breakage under the proportional method, where recognition of breakage income is based upon the historical run-off rate of unredeemed gift cards. The Company’s gift card deferred revenue liability was $256 as of February 1, 2025 and $228 as of February 3, 2024. Disaggregated Revenues The following table presents sales revenue by type of product for the years ended February 1, 2025, February 3, 2024, and January 28, 2023:
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Merchandise Costs | Merchandise Costs The “Merchandise costs” line item of the Consolidated Statements of Operations includes product costs, net of discounts and allowances; advertising costs (see separate discussion below); inbound freight charges; warehousing costs, including receiving and inspection costs; transportation costs and food production costs. Warehousing, transportation and manufacturing management salaries are also included in the “Merchandise costs” line item; however, purchasing management salaries and administration costs are included in the “OG&A” line item along with most of the Company’s other managerial and administrative costs. Shipping and delivery costs associated with the Company’s digital offerings originating from non-retail store locations are included in the “Merchandise costs” line item. Rent expense and depreciation and amortization expense are shown separately in the Consolidated Statements of Operations. Warehousing and transportation costs include distribution center direct wages, transportation direct wages, repairs and maintenance, utilities, inbound freight and, where applicable, third-party warehouse management fees. These costs are recognized in the periods the related expenses are incurred. The Company believes the classification of costs included in merchandise costs could vary widely throughout the industry. The Company’s approach is to include in the “Merchandise costs” line item the direct, net costs of acquiring products and making them available to customers. The Company believes this approach most accurately presents the actual costs of products sold. The Company recognizes all vendor allowances as a reduction in merchandise costs when the related product is sold. When possible, vendor allowances are applied to the related product cost by item and, therefore, reduce the carrying value of inventory by item. When the items are sold, the vendor allowance is recognized. When it is not possible, due to systems constraints, to allocate vendor allowances to the product by item, vendor allowances are recognized as a reduction in merchandise costs based on inventory turns and, therefore, recognized as the product is sold. |
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Advertising Costs | Advertising Costs The Company’s advertising costs are recognized in the periods the related expenses are incurred and are included in the “Merchandise costs” line item of the Consolidated Statements of Operations. The Company’s advertising costs totaled $1,171 in 2024, $1,089 in 2023 and $1,030 in 2022. The Company does not record vendor allowances for co-operative advertising as a reduction of advertising expense. |
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Operating, General and Administrative Expenses | Operating, General and Administrative Expenses
OG&A expenses consist primarily of employee-related costs such as wages, healthcare benefit costs, retirement plan costs, utilities, and credit card fees. Shipping and delivery costs associated with the Company's digital offerings originating from retail store locations, including third-party delivery fees, are included in the “OG&A” line item of the Consolidated Statements of Operations. Rent expense, depreciation and amortization expense and interest expense are shown separately in the Consolidated Statement of Operations. |
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Consolidated Statements of Cash Flows | Consolidated Statements of Cash Flows For purposes of the Consolidated Statements of Cash Flows, the Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be temporary cash investments. |
ACCOUNTING POLICIES (Tables) |
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Schedule of changes in outstanding obligations under financing arrangement |
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Summary of changes in self-insurance liability | The following table summarizes the changes in the Company’s self-insurance liability through February 1, 2025:
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Schedule of sales revenue by type of product |
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GOODWILL AND INTANGIBLE ASSETS (Tables) |
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Summary of the changes in net goodwill |
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Summary of intangible assets | The following table summarizes the Company’s intangible assets balance through February 1, 2025:
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Schedule of future amortization expense associated with the net carrying amount of definite-lived intangible assets |
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PROPERTY, PLANT AND EQUIPMENT, NET (Tables) |
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Schedule of property, plant and equipment, net |
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TAXES BASED ON INCOME (Tables) |
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Schedule of provision for taxes based on income |
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Schedule of reconciliation of the statutory federal rate and the effective rate |
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Schedule of the tax effects of significant temporary differences that comprise tax balances |
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Schedule of reconciliation of beginning and ending amounts of unrecognized tax benefits |
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DEBT OBLIGATIONS (Tables) |
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Schedule of long-term debt |
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Schedule of aggregate annual maturities and scheduled payments of long-term debt | The aggregate annual maturities and scheduled payments of long-term debt, as of year-end 2024, and for the years subsequent to 2024 are:
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DERIVATIVE FINANCIAL INSTRUMENTS (Tables) |
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Schedule of effect of derivative instruments designated as cash flow hedges |
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Schedule of effects of master netting agreements |
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FAIR VALUE MEASUREMENTS (Tables) |
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Schedule of fair value measurements | February 1, 2025 Fair Value Measurements Using
February 3, 2024 Fair Value Measurements Using
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Schedule of other assets |
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) |
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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in AOCI by component |
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Schedule of items reclassified out of AOCI and the related tax effects |
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LEASES AND LEASE-FINANCED TRANSACTIONS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 01, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of supplemental balance sheet classification |
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Schedule of components of lease cost |
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Schedule of maturities of operating and finance lease liabilities |
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Schedule of weighted-average lease term and discount rate |
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Schedule of supplemental cash flow information |
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EARNINGS PER COMMON SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 01, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER COMMON SHARE | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per common and diluted shares |
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STOCK-BASED COMPENSATION (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 01, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of changes in stock options outstanding |
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Summary of options outstanding, exercisable and expected to vest |
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Summary of changes in restricted stock outstanding |
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Summary of weighted-average assumptions used for grants awarded to option holders |
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COMPANY- SPONSORED BENEFIT PLANS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 01, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY- SPONSORED BENEFIT PLANS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of amounts recognized in AOCI (pre-tax) |
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Schedule of other changes recognized in other comprehensive income (loss) (pre-tax) |
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Schedule of change in benefit obligation, change in plan assets and the funded status of the plans recorded in the Consolidated Balance Sheets and net amounts recognized at the end of fiscal years |
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Schedule of weighted-average assumptions associated with pension and other benefit costs |
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Schedule of components of net periodic benefit cost (benefit) |
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Schedule of projected benefit obligation ("PBO"), accumulated benefit obligation ("ABO") and the fair value of plan assets for all Company-sponsored pension plans |
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Schedule of estimated future benefit payments for defined benefit pension plans and other benefits |
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Schedule of target and actual pension plan asset allocations |
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Schedule of fair values of defined benefit pension plan assets | Assets at Fair Value as of February 1, 2025
Assets at Fair Value as of February 3, 2024
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Schedule of reconciliation of beginning and ending balances for measurements using significant unobservable inputs (Level 3) |
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MULTI-EMPLOYER PENSION PLANS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Feb. 01, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
MULTI-EMPLOYER PENSION PLANS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of multi-employer pension plans |
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MULTI-EMPLOYER PENSION PLANS | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of multi-employer pension plans |
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SEGMENT REPORTING (Tables) |
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SEGMENT REPORTING | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of company's retail operations segment revenue |
|
ACCOUNTING POLICIES (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025
USD ($)
Center
pharmacy
item
state
|
Feb. 03, 2024
USD ($)
|
Jan. 28, 2023 |
|
Description of Business, Basis of Presentation and Principles of Consolidation | |||
Number of operating supermarkets | item | 2,731 | ||
Number of operating pharmacies | pharmacy | 2,273 | ||
Number of operating fuel centers | Center | 1,702 | ||
Number of states in which entity operates | state | 35 | ||
Fiscal Year | |||
Length of fiscal period | 364 days | 371 days | 364 days |
Inventories | |||
Percentage of inventory valued at LIFO method | 92.00% | 91.00% | |
Replacement cost over carrying value | $ | $ 2,404 | $ 2,309 |
ACCOUNTING POLICIES - PROPERTY AND EQUIPMENT AND LONG-LIVED ASSETS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Property, Plant and Equipment | |||
Depreciation and amortization | $ 3,246 | $ 3,125 | $ 2,965 |
Leases | |||
Option to renew - Operating | true | ||
Option to renew - Finance | true | ||
Impairment of Long-Lived Assets | |||
Asset impairment charges | $ 98 | 69 | 68 |
Impairment of assets disposed of | 25 | ||
Impairment of assets disposed of, net of tax | 19 | ||
Operating Lease, Impairment Loss | 13 | $ 15 | |
Supplier Finance Program, Obligation | |||
Balance at the beginning of the year | $ 325 | ||
Supplier Finance Program, Obligation, Current, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current | |
Invoices confirmed during the year | $ 1,797 | ||
Confirmed invoices paid during the year | (1,828) | ||
Balance at the end of the year | $ 294 | $ 325 | |
Supplier Finance Program, Obligation, Current, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current | Accounts Payable, Current | |
Accounts payable financing arrangement term | 90 days | ||
Contingent Consideration | |||
Revaluation of contingent consideration | $ 20 | ||
Accounts payable | |||
Supplier Finance Program, Obligation | |||
Accounts payable financing arrangements | $ 294 | $ 325 | |
Minimum | |||
Leases | |||
Term - Operating | 10 years | ||
Term - Finance | 10 years | ||
Maximum | |||
Leases | |||
Term - Operating | 20 years | ||
Term - Finance | 20 years | ||
Buildings and land improvements | Minimum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 10 years | ||
Buildings and land improvements | Maximum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 40 years | ||
Store equipment | Minimum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 3 years | ||
Store equipment | Maximum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 9 years | ||
Leasehold improvements | Minimum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 4 years | ||
Leasehold improvements | Maximum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 25 years | ||
Food production plant and distribution center equipment | Minimum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 3 years | ||
Food production plant and distribution center equipment | Maximum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 15 years | ||
Information Technology | Minimum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 3 years | ||
Information Technology | Maximum | |||
Property, Plant and Equipment | |||
Useful life of the assets | 5 years |
ACCOUNTING POLICIES - STOCK-BASED COMPENSATION (Details) |
12 Months Ended |
---|---|
Feb. 01, 2025 | |
Employee Stock Option | |
Share Based Compensation | |
Expiration period from date of grant | 10 years |
Employee Stock Option | Minimum | |
Share Based Compensation | |
Vesting period from date of grant | 1 year |
Employee Stock Option | Maximum | |
Share Based Compensation | |
Vesting period from date of grant | 4 years |
Restricted Stock [Member] | Minimum | |
Share Based Compensation | |
Vesting period from date of grant | 1 year |
Restricted Stock [Member] | Maximum | |
Share Based Compensation | |
Vesting period from date of grant | 4 years |
ACCOUNTING POLICIES - SELF-INSURANCE (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Changes in self-insurance liability | |||
Balance at the beginning of the period | $ 761 | $ 712 | $ 721 |
Expense | 427 | 330 | 227 |
Claim payments | (345) | (281) | (236) |
Balance at the end of the period | 843 | 761 | 712 |
Less: Current portion | (345) | (281) | (236) |
Long-term portion | 498 | $ 480 | $ 476 |
Minimum | |||
Changes in self-insurance liability | |||
Insurance coverage for some risks, including cyber exposure and property-related losses | 25 | ||
Maximum | |||
Changes in self-insurance liability | |||
Insurance coverage for some risks, including cyber exposure and property-related losses | $ 30 |
ACCOUNTING POLICIES - REVENUE RECOGNITION (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Disaggregation of revenue | |||
Total Sales and other revenue | $ 147,123 | $ 150,039 | $ 148,258 |
Receivables | $ 2,195 | 2,136 | |
Typical period for redemption of gift certificates | 12 months | ||
Gift card and gift certificate deferred revenue liability | $ 256 | $ 228 | |
Percentage of total sales | 100.00% | 100.00% | 100.00% |
Non perishable | |||
Disaggregation of revenue | |||
Total Sales and other revenue | $ 76,966 | $ 78,106 | $ 75,386 |
Percentage of total sales | 52.30% | 52.00% | 50.90% |
Fresh | |||
Disaggregation of revenue | |||
Total Sales and other revenue | $ 36,317 | $ 36,568 | $ 36,285 |
Percentage of total sales | 24.70% | 24.40% | 24.50% |
Supermarket fuel | |||
Disaggregation of revenue | |||
Total Sales and other revenue | $ 14,973 | $ 16,621 | $ 18,632 |
Percentage of total sales | 10.20% | 11.10% | 12.60% |
Pharmacy | |||
Disaggregation of revenue | |||
Total Sales and other revenue | $ 15,691 | $ 14,406 | $ 13,448 |
Typical period for collection of third party receivables | 3 months | ||
Receivables | $ 622 | $ 616 | |
Percentage of total sales | 10.60% | 9.60% | 9.00% |
Other | |||
Disaggregation of revenue | |||
Total Sales and other revenue | $ 3,176 | $ 4,338 | $ 4,507 |
Percentage of total sales | 2.20% | 2.90% | 3.00% |
ACCOUNTING POLICIES - ADVERTISING (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Advertising Costs | |||
Advertising costs | $ 1,171 | $ 1,089 | $ 1,030 |
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Jan. 28, 2023 |
Feb. 01, 2025 |
Feb. 03, 2024 |
|
Goodwill | |||
Goodwill, Beginning Balance | $ 5,737 | $ 5,737 | |
Accumulated impairment losses | (2,821) | (2,821) | |
Goodwill, beginning balance | 2,916 | 2,916 | |
Sale of Kroger Specialty Pharmacy | $ (160) | (242) | 0 |
Goodwill, end of year | 5,737 | 5,385 | 5,737 |
Accumulated impairment losses | (2,821) | (2,711) | (2,821) |
Goodwill, Total | $ 2,916 | $ 2,674 | $ 2,916 |
GOODWILL AND INTANGIBLE ASSETS - IMPAIRMENT (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jan. 28, 2023 |
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 29, 2022 |
|
Goodwill impairment charge | $ 160 | $ 242 | $ 0 | |
Goodwill | 2,916 | $ 2,674 | $ 2,916 | |
Vitacost.com reporting unit | ||||
Goodwill | $ 0 | $ 160 |
GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Feb. 01, 2025 |
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Intangible assets | ||||
Intangible Assets, Gross (Excluding Goodwill) | $ 1,254 | $ 1,254 | $ 1,440 | |
Accumulated amortization | (420) | (420) | (541) | |
Amortization expense associated with intangible assets | 30 | 42 | $ 52 | |
Future amortization expense associated with the net carrying amount of definite-lived intangible assets | ||||
2025 | 27 | 27 | ||
2026 | 12 | 12 | ||
2027 | 11 | 11 | ||
2028 | 10 | 10 | ||
2029 | 10 | 10 | ||
Thereafter | 11 | 11 | ||
Total future estimated amortization associated with definite-lived intangible assets | 81 | 81 | ||
Trade name | ||||
Intangible assets | ||||
Indefinite-lived, Gross carrying amount | 655 | 655 | 685 | |
Impairment of intangible asset | $ 30 | |||
Impairment, Intangible Asset, Indefinite-Lived (Excluding Goodwill), Statement of Income or Comprehensive Income [Extensible Enumeration] | Operating, General and Administrative Expense | |||
Impairment of intangible asset, net of tax | $ 24 | |||
Liquor licenses | ||||
Intangible assets | ||||
Indefinite-lived, Gross carrying amount | 98 | 98 | 91 | |
Pharmacy prescription files | ||||
Intangible assets | ||||
Gross carrying amount | 247 | 247 | 360 | |
Accumulated amortization | (183) | (183) | (259) | |
Customer Relationships | ||||
Intangible assets | ||||
Gross carrying amount | 148 | 148 | 186 | |
Accumulated amortization | (145) | (145) | (179) | |
Definite-lived other | ||||
Intangible assets | ||||
Gross carrying amount | 106 | 106 | 118 | |
Accumulated amortization | $ (92) | $ (92) | $ (103) |
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
Property, Plant and Equipment | ||
Total property, plant and equipment | $ 60,072 | $ 56,693 |
Accumulated depreciation and amortization | (34,369) | (31,463) |
Property, plant and equipment, net | 25,703 | 25,230 |
Finance leases - accumulated amortization | 915 | 730 |
Property, plant and equipment collateralized, net book value | 97 | 104 |
Other assets | ||
Property, Plant and Equipment | ||
Capitalized implementation costs | 270 | 257 |
Accumulated Amortization | 97 | 65 |
Land | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 3,609 | 3,512 |
Buildings and land improvements | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 16,100 | 15,137 |
Equipment | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 21,082 | 19,375 |
Leasehold improvements | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 13,287 | 12,394 |
Construction-in-progress | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | 3,162 | 3,574 |
Leased property under finance Leases | ||
Property, Plant and Equipment | ||
Total property, plant and equipment | $ 2,832 | $ 2,701 |
TAXES BASED ON INCOME - COMPONENTS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Federal | |||
Current | $ 622 | $ 707 | $ 401 |
Deferred | (62) | (130) | 162 |
Subtotal federal | 560 | 577 | 563 |
State and local | |||
Current | 97 | 114 | 91 |
Deferred | 13 | (24) | (1) |
Subtotal state and local | 110 | 90 | 90 |
Total | $ 670 | $ 667 | $ 653 |
TAXES BASED ON INCOME - EFFECTIVE RATE (Details) |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
A reconciliation of the statutory federal rate and the effective rate follows: | |||
Statutory rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal tax benefit | 2.60% | 2.50% | 2.50% |
Credits | (0.80%) | (1.10%) | (0.80%) |
Resolution of tax audit examinations | (0.20%) | (0.20%) | |
Excess tax benefits from share-based payments | (0.90%) | (0.70%) | (1.90%) |
Impairment of goodwill related to Vitacost.com | 1.20% | ||
Non-deductible legal settlements | (0.10%) | 1.40% | |
Non-deductible executive compensation | 0.20% | 0.30% | 0.50% |
Tax benefit from sale of Kroger Specialty Pharmacy | (0.90%) | ||
Other changes, net | (0.90%) | 0.10% | 0.20% |
Effective income tax rate (as a percent) | 20.00% | 23.50% | 22.50% |
TAXES BASED ON INCOME - DEFERRED TAX BALANCES (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
---|---|---|---|
Deferred tax assets | |||
Compensation related costs | $ 338 | $ 361 | |
Lease liabilities | 2,126 | 2,100 | |
Closed store reserves | 58 | 51 | |
Net operating loss and credit carryforwards | 70 | 76 | |
Deferred Income | 83 | 102 | |
Legal settlements | 303 | 313 | |
Allowance for uncollectible receivables | 24 | 30 | |
Other | 44 | ||
Subtotal | 3,046 | 3,033 | |
Valuation allowance | (54) | (55) | $ (83) |
Total deferred tax assets | 2,992 | 2,978 | |
Deferred tax liabilities: | |||
Depreciation and amortization | (1,895) | (2,038) | |
Operating lease assets | (2,002) | (1,985) | |
Insurance related costs | (229) | (241) | |
Inventory related costs | (283) | (259) | |
Other | (16) | ||
Total deferred tax liabilities | (4,409) | (4,539) | |
Net deferred tax liabilities | $ (1,417) | $ (1,561) |
TAXES BASED ON INCOME - NOLS AND CREDITS (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
---|---|---|---|
Operating loss carryforwards and tax credit carryforwards | |||
Deferred tax assets | $ 2,992 | $ 2,978 | |
Total valuation allowance | 54 | 55 | $ 83 |
Other assets | |||
Operating loss carryforwards and tax credit carryforwards | |||
Deferred tax assets | $ 18 | ||
State | |||
Operating loss carryforwards and tax credit carryforwards | |||
Net operating loss carryforwards | 1,283 | ||
Credit carryforwards | $ 7 |
TAXES BASED ON INCOME - UNRECOGNIZED TAX BENEFITS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Reconciliation of the beginning and ending amount of unrecognized tax benefits | |||
Balance at the beginning of the period | $ 90 | $ 93 | $ 100 |
Additions based on tax positions related to the current year | 11 | 10 | 8 |
Additions for tax positions of prior years | 12 | 3 | 6 |
Reductions for tax positions of prior years | (9) | (4) | |
Settlements | (4) | (1) | (9) |
Lapse of statute | (7) | (6) | (8) |
Balance at the end of the period | 102 | 90 | 93 |
Impact on effective tax rate, if amount of unrecognized tax benefits is recognized | 70 | 62 | 66 |
Interest and penalties recognized (recoveries) | 4 | 1 | (6) |
Interest and penalties | $ 19 | $ 15 | $ 14 |
DEBT OBLIGATIONS (Details) - USD ($) $ in Millions |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
Dec. 11, 2024 |
Sep. 13, 2024 |
Aug. 20, 2024 |
|
DEBT OBLIGATIONS | ||||||
Total debt, excluding obligations under finance leases | $ 15,909 | $ 10,187 | ||||
Less current portion | (104) | (25) | ||||
Total long-term debt, excluding obligations under finance leases | $ 15,805 | 10,162 | ||||
Minimum Number Of Days Notice Required Prior to the Date of Redemption | 5 days | |||||
Redemption event | 50.00% | |||||
Cash paid for interest | $ 554 | 636 | $ 578 | |||
Interest income | 311 | 118 | $ 33 | |||
Senior notes due through 2064 | ||||||
DEBT OBLIGATIONS | ||||||
Total debt, excluding obligations under finance leases | $ 14,854 | 9,123 | ||||
Senior notes due through 2064 | Minimum | ||||||
DEBT OBLIGATIONS | ||||||
Interest rate (as a percent) | 1.70% | |||||
Senior notes due through 2064 | Maximum | ||||||
DEBT OBLIGATIONS | ||||||
Interest rate (as a percent) | 8.00% | |||||
Senior notes | ||||||
DEBT OBLIGATIONS | ||||||
Debt issued | $ 10,500 | $ 10,500 | ||||
Repayment of debt | 4,700 | |||||
Senior notes 3.85% | ||||||
DEBT OBLIGATIONS | ||||||
Repayment of debt | $ 600 | |||||
Interest rate (as a percent) | 3.85% | |||||
Senior notes 4.00% | ||||||
DEBT OBLIGATIONS | ||||||
Repayment of debt | $ 500 | |||||
Interest rate (as a percent) | 4.00% | |||||
Commercial paper borrowings | ||||||
DEBT OBLIGATIONS | ||||||
Total debt, excluding obligations under finance leases | 0 | $ 0 | ||||
Other | ||||||
DEBT OBLIGATIONS | ||||||
Total debt, excluding obligations under finance leases | 1,055 | 1,064 | ||||
Unsecured revolving credit facility | ||||||
DEBT OBLIGATIONS | ||||||
Total debt, excluding obligations under finance leases | 0 | 0 | ||||
Maximum borrowing capacity | $ 2,750 | $ 2,750 | ||||
Outstanding letters of credit | 261 | 314 | ||||
Reduction in funds available under letter of credit agreement | $ 1 | $ 2 | ||||
Unsecured revolving credit facility | Proposed Merger Closing Date | ||||||
DEBT OBLIGATIONS | ||||||
Maximum borrowing capacity | 5,000 | |||||
Additional borrowing capacity | $ 2,250 | |||||
Unsecured revolving credit facility | Federal Funds Rate | ||||||
DEBT OBLIGATIONS | ||||||
Debt instrument variable basis rate | Federal Funds Rate | |||||
Interest rate margin (as a percent) | 0.50% | |||||
Unsecured revolving credit facility | Bank of America prime rate | ||||||
DEBT OBLIGATIONS | ||||||
Debt instrument variable basis rate | Bank of America’s prime rate | |||||
Unsecured revolving credit facility | One-month SOFR plus 1.0 percent plus a market rate spread based on the company's public debt rating | ||||||
DEBT OBLIGATIONS | ||||||
Debt instrument variable basis rate | one-month Term SOFR plus 1.0%, plus a market rate spread based on the Company’s Public Debt Rating | |||||
Interest rate margin (as a percent) | 1.00% | |||||
Unsecured revolving credit facility | Maximum | ||||||
DEBT OBLIGATIONS | ||||||
Leverage ratio | 3.5 |
DEBT OBLIGATIONS - MATURITIES (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
Aggregate annual maturities and scheduled payments of long-term debt | ||
2025 | $ 104 | |
2026 | 1,300 | |
2027 | 606 | |
2028 | 675 | |
2029 | 583 | |
Thereafter | 12,641 | |
Total debt, excluding obligations under finance leases | $ 15,909 | $ 10,187 |
DERIVATIVE FINANCIAL INSTRUMENTS - DERIVATIVE INSTRUMENTS (Details) $ in Millions |
12 Months Ended | ||||
---|---|---|---|---|---|
Feb. 01, 2025
USD ($)
agreement
DerivativeInstrument
|
Feb. 03, 2024
USD ($)
DerivativeInstrument
|
Jan. 28, 2023
USD ($)
|
|||
Interest Rate Risk Management | |||||
Interest rate risk management guideline of floating debt to total debt portfolio (as a percent) | 25.00% | ||||
Derivative Asset | $ 160 | ||||
Unamortized gains (losses) on cash flow hedging activities, net of income tax | [1] | $ (103) | 183 | $ (89) | |
Derivative Liabilities | $ 3 | ||||
Interest rate swaps | |||||
Interest Rate Risk Management | |||||
Number of interest rate derivatives | DerivativeInstrument | 5 | ||||
Notional amount | $ 5,350 | ||||
Terminated forward-starting interest swaps | |||||
Interest Rate Risk Management | |||||
Notional amount | $ 5,350 | ||||
Number of derivatives terminated | DerivativeInstrument | 5 | ||||
Designated | Cash flow hedges | Interest rate swaps | |||||
Interest Rate Risk Management | |||||
Notional amount | 2,350 | ||||
Derivative Asset | $ 125 | ||||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | ||||
Unamortized gains (losses) on cash flow hedging activities, net of income tax | $ 95 | ||||
Designated | Cash flow hedges | Terminated forward-starting interest swaps | |||||
Interest Rate Risk Management | |||||
Notional amount | $ 2,350 | ||||
Unamortized gains (losses) on cash flow hedging activities, net of income tax | 36 | ||||
Gain/(Loss) in AOCI on Derivatives | 48 | ||||
Designated | Cash flow hedges | Terminated 10-year treasury lock agreements | |||||
Interest Rate Risk Management | |||||
Notional amount | $ 2,100 | ||||
Number of interest-rate swaps | agreement | 2 | ||||
Derivative, term of contract | 10 years | ||||
Average fixed rate (as a percent) | 3.91% | ||||
Designated | Cash flow hedges | Terminated 30-year treasury lock agreements | |||||
Interest Rate Risk Management | |||||
Notional amount | $ 3,250 | ||||
Number of interest-rate swaps | agreement | 2 | ||||
Derivative, term of contract | 30 years | ||||
Average fixed rate (as a percent) | 4.11% | ||||
Designated | Cash flow hedges | Terminated Treasury lock agreements | |||||
Interest Rate Risk Management | |||||
Unamortized gains (losses) on cash flow hedging activities, net of income tax | $ (43) | ||||
Gain/(Loss) in AOCI on Derivatives | (56) | ||||
Designated | Cash flow hedges | Forward-starting interest rate swaps | Interest Expense | |||||
Interest Rate Risk Management | |||||
Gain/(Loss) in AOCI on Derivatives | (34) | 60 | (129) | ||
Gain/(Loss) Reclassified from AOCI into Income | (8) | (6) | $ (7) | ||
Not Designated | Interest rate swaps | |||||
Interest Rate Risk Management | |||||
Notional amount | 3,000 | ||||
Derivative Asset | $ 35 | ||||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | ||||
Derivative Liabilities | $ 3 | ||||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities, Noncurrent | ||||
Not Designated | Interest rate swaps | (Loss) gain on investments | |||||
Interest Rate Risk Management | |||||
Unrealized gain (loss) | $ 174 | ||||
Not Designated | Terminated forward-starting interest swaps | |||||
Interest Rate Risk Management | |||||
Notional amount | 3,000 | ||||
Realized loss on derivatives | $ 55 | ||||
|
DERIVATIVE FINANCIAL INSTRUMENTS - MASTER NETTING AGREEMENTS (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
Assets | ||
Gross Amount Recognized | $ 160 | |
Net Amount Presented in the Balance Sheet | 160 | |
Cash Collateral | 0 | |
Net Amount | 160 | |
Liabilities | ||
Gross Amount Recognized | 3 | |
Net Amount Presented in the Balance Sheet | 3 | |
Cash Collateral | $ 0 | 0 |
Net Amount | $ 3 |
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
Jun. 22, 2018 |
|
FAIR VALUE MEASUREMENTS | ||||
Commodity Contracts | $ (3) | |||
Forward-Starting Interest Rate Swaps and Commodity Contracts | 160 | |||
Other long-lived asset impairment charge | $ 98 | 69 | $ 68 | |
Impairment charges for property losses | 25 | |||
Impairment for property losses net of tax | 19 | |||
Revaluation of contingent consideration | $ 20 | |||
Final contingent consideration payment | 83 | |||
Proceeds from equity investment | 303 | |||
Realized gain on equity securities | 23 | |||
Home Chef | ||||
FAIR VALUE MEASUREMENTS | ||||
Contingent consideration | $ 91 | |||
Other Investments | Other assets | ||||
FAIR VALUE MEASUREMENTS | ||||
Other equity investments of fair value | 96 | 92 | ||
Carrying Value | ||||
FAIR VALUE MEASUREMENTS | ||||
Long-lived assets before impairment | 229 | 72 | ||
Fair value of total debt | 15,909 | 10,187 | ||
Fair value | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value of total debt | 14,648 | 9,401 | ||
Fair Value, Recurring | ||||
FAIR VALUE MEASUREMENTS | ||||
Marketable Securities | 274 | 646 | ||
Commodity Contracts | (1) | |||
Forward-Starting Interest Rate Swaps and Commodity Contracts | 155 | |||
Total | 273 | 801 | ||
Nonrecurring | Fair value | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value of long lived assets | 131 | 3 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Other assets | ||||
FAIR VALUE MEASUREMENTS | ||||
Fair value | 183 | 578 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | (Loss) gain on investments | ||||
FAIR VALUE MEASUREMENTS | ||||
Loss on investments | 116 | 66 | ||
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Recurring | ||||
FAIR VALUE MEASUREMENTS | ||||
Marketable Securities | 274 | 646 | ||
Total | 274 | 646 | ||
Significant Other Observable Inputs (Level 2) | Fair Value, Recurring | ||||
FAIR VALUE MEASUREMENTS | ||||
Commodity Contracts | (1) | |||
Forward-Starting Interest Rate Swaps and Commodity Contracts | 155 | |||
Total | $ (1) | $ 155 |
FAIR VALUE MEASUREMENTS - OTHER ASSETS (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
FAIR VALUE MEASUREMENTS | ||
Equity method and other long-term investments | $ 314 | $ 290 |
Notes receivable | 75 | 78 |
Prepaid deposits under certain contractual arrangements | 201 | 193 |
Implementation costs related to cloud computing arrangements | 270 | 257 |
Forward-starting interest rate swaps | 160 | |
Funded asset status of pension plans | 24 | 44 |
Other | 130 | 128 |
Total | $ 1,014 | $ 1,150 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - CHANGES IN AOCI BY COMPONENT (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | $ 11,615 | ||
Amounts reclassified out of AOCI | 4 | $ (5) | $ 12 |
Net current-period OCI | (132) | 143 | (165) |
Balance at the end of the period | 8,285 | 11,615 | |
Accumulated Other Comprehensive Gain (Loss) | |||
Accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | (489) | (632) | |
OCI before reclassifications | (136) | 148 | |
Amounts reclassified out of AOCI | 4 | (5) | |
Net current-period OCI | (132) | 143 | (165) |
Balance at the end of the period | (621) | (489) | (632) |
Cash Flow Hedging Activities | |||
Accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | 60 | (129) | |
OCI before reclassifications | (103) | 183 | |
Amounts reclassified out of AOCI | 8 | 6 | |
Net current-period OCI | (95) | 189 | |
Balance at the end of the period | (35) | 60 | (129) |
OCI before reclassifications, tax | (31) | 56 | |
Amounts reclassified out of AOCI, tax | 1 | 2 | |
Pension and Postretirement Defined Benefit Plans | |||
Accumulated other comprehensive income (loss) | |||
Balance at the beginning of the period | (549) | (503) | |
OCI before reclassifications | (33) | (35) | |
Amounts reclassified out of AOCI | (4) | (11) | 5 |
Net current-period OCI | (37) | (46) | |
Balance at the end of the period | (586) | (549) | (503) |
OCI before reclassifications, tax | (10) | (11) | |
Amounts reclassified out of AOCI, tax | $ (1) | $ (3) | $ 2 |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - ITEMS RECLASSIFIED OUT OF AOCI (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||
Tax expense | $ (670) | $ (667) | $ (653) |
Net earnings attributable to The Kroger Co. | 2,665 | 2,164 | 2,244 |
Total reclassifications, net of tax | 4 | (5) | 12 |
Cash flow hedging activity | |||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||
Tax expense | (1) | (2) | |
Total reclassifications, net of tax | 8 | 6 | |
Pension and postretirement defined benefit plan | |||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||
Amortization of amounts included in net periodic pension cost | (5) | (14) | 7 |
Tax expense | 1 | 3 | (2) |
Total reclassifications, net of tax | (4) | (11) | 5 |
Reclassification out of AOCI | Cash flow hedging activity | |||
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |||
Amortization of gains and losses on cash flow hedging activities | 9 | 8 | 9 |
Tax expense | (1) | (2) | (2) |
Net earnings attributable to The Kroger Co. | $ 8 | $ 6 | $ 7 |
LEASES AND LEASE-FINANCED TRANSACTIONS - NARRATIVE (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
|
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Option to renew - Operating | true | |
Option to renew - Finance | true | |
Finance lease assets | $ 1,917 | $ 1,971 |
Current - Finance | $ 168 | $ 173 |
Current - Finance - Financial position | Current portion of long-term debt including obligations under finance leases | Current portion of long-term debt including obligations under finance leases |
Noncurrent - Finance | $ 1,828 | $ 1,866 |
Noncurrent - Finance - Financial position | Long-term debt including obligations under finance leases | Long-term debt including obligations under finance leases |
Digital and Robotic Facilities | ||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Term - Finance | 10 years | |
Option to renew - Finance | true | |
Finance lease assets recorded | $ 91 | $ 147 |
Finance lease liability recorded | 73 | 135 |
Finance lease assets | 926 | 960 |
Current - Finance | $ 104 | $ 100 |
Current - Finance - Financial position | Current portion of long-term debt including obligations under finance leases | Current portion of long-term debt including obligations under finance leases |
Noncurrent - Finance | $ 781 | $ 814 |
Noncurrent - Finance - Financial position | Long-term debt including obligations under finance leases | Long-term debt including obligations under finance leases |
Minimum | ||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Term - Operating | 10 years | |
Term - Finance | 10 years | |
Sublease term - Operating | 1 year | |
Sublease term - Finance | 1 year | |
Maximum | ||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Term - Operating | 20 years | |
Term - Finance | 20 years | |
Sublease term - Operating | 20 years | |
Sublease term - Finance | 20 years |
LEASES AND LEASE-FINANCED TRANSACTIONS - BALANCE SHEET CLASSIFICATION (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Operating | $ 6,839 | $ 6,692 |
Finance lease assets | $ 1,917 | $ 1,971 |
Finance lease assets - Financial position | Property, plant and equipment, net | Property, plant and equipment, net |
Total lease assets | $ 8,756 | $ 8,663 |
Current - Operating | 599 | 670 |
Current - Finance | $ 168 | $ 173 |
Current - Finance - Financial position | Current portion of long-term debt including obligations under finance leases | Current portion of long-term debt including obligations under finance leases |
Noncurrent - Operating | $ 6,578 | $ 6,351 |
Noncurrent - Finance | $ 1,828 | $ 1,866 |
Noncurrent - Finance - Financial position | Long-term debt including obligations under finance leases | Long-term debt including obligations under finance leases |
Total lease liabilities | $ 9,173 | $ 9,060 |
Finance leases - accumulated amortization | $ 915 | $ 730 |
LEASES AND LEASE-FINANCED TRANSACTIONS - LEASE COST (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
|
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Net lease cost | $ 1,164 | $ 1,164 |
Rent Expense | ||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Operating lease cost | 988 | 1,006 |
Sublease and other rental income | (111) | (115) |
Depreciation and Amortization | ||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Amortization of leased assets | 203 | 195 |
Interest Expense | ||
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Interest on lease liabilities | $ 84 | $ 78 |
LEASES AND LEASE-FINANCED TRANSACTIONS - MATURITIES (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
Operating leases maturities: | ||
2025 | $ 974 | |
2026 | 921 | |
2027 | 866 | |
2028 | 799 | |
2029 | 734 | |
Thereafter | 5,832 | |
Total lease payments | 10,126 | |
Less amount representing interest | 2,949 | |
Present value of lease liabilities | 7,177 | |
Finance leases maturities: | ||
2025 | 261 | |
2026 | 262 | |
2027 | 265 | |
2028 | 259 | |
2029 | 255 | |
Thereafter | 1,280 | |
Total lease payments | 2,582 | |
Less amount representing interest | 586 | |
Finance lease liabilities | $ 1,996 | |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Long Term Debt and Finance Lease, Long Term Debt and Finance Lease Current | Long Term Debt and Finance Lease, Long Term Debt and Finance Lease Current |
Maturities | ||
2025 | $ 1,235 | |
2026 | 1,183 | |
2027 | 1,131 | |
2028 | 1,058 | |
2029 | 989 | |
Thereafter | 7,112 | |
Total lease payments | 12,708 | |
Current - Operating | 599 | $ 670 |
Current finance leases | $ 168 | $ 173 |
LEASES AND LEASE-FINANCED TRANSACTIONS - SUB LEASES (Details) $ in Millions |
Feb. 01, 2025
USD ($)
|
---|---|
LEASES AND LEASE-FINANCED TRANSACTIONS | |
Future minimum rentals under non-cancellable subleases | $ 269 |
LEASES AND LEASE-FINANCED TRANSACTIONS - QUANTITATIVE INFORMATION (Details) |
Feb. 01, 2025 |
Feb. 03, 2024 |
---|---|---|
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Operating leases - Weighted-average remaining lease term (years) | 13 years 8 months 12 days | 13 years 10 months 24 days |
Finance leases - Weighted-average remaining lease term (years) | 11 years 6 months | 11 years 9 months 18 days |
Operating leases - Weighted-average discount rate | 4.60% | 4.40% |
Finance leases - Weighted-average discount rate | 4.70% | 3.80% |
LEASES AND LEASE-FINANCED TRANSACTIONS - CASH FLOW INFORMATION (Details) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 01, 2025
USD ($)
property
|
Feb. 03, 2024
USD ($)
property
|
|
LEASES AND LEASE-FINANCED TRANSACTIONS | ||
Operating cash flows from operating leases | $ 916 | $ 984 |
Operating cash flows from finance leases | 84 | 78 |
Financing cash flows from finance leases | 168 | 173 |
Leased assets obtained in exchange for new operating lease liabilities | 786 | 700 |
Leased assets obtained in exchange for new finance lease liabilities | 157 | 168 |
Net gain recognized from sale and leaseback transactions | 39 | 37 |
Impairment of operating lease assets | $ 13 | $ 15 |
Number of properties in sales leaseback transaction | property | 5 | 9 |
Total proceeds | $ 52 | $ 52 |
EARNINGS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
EARNINGS PER COMMON SHARE | |||
Net earnings numerator (basic) | $ 2,645 | $ 2,146 | $ 2,224 |
Net earnings numerator (diluted) | $ 2,645 | $ 2,146 | $ 2,224 |
Average number of common shares used in basic calculation | 715.0 | 718.0 | 718.0 |
Net earnings (loss) attributable to The Kroger Co. per basic common share | $ 3.7 | $ 2.99 | $ 3.1 |
Dilutive effect of stock options (in shares) | 5.0 | 7.0 | 9.0 |
Average number of common shares used in diluted calculation | 720.0 | 725.0 | 727.0 |
Net earnings attributable to The Kroger Co. per diluted common share | $ 3.67 | $ 2.96 | $ 3.06 |
Undistributed and distributed earnings (loss) to participating securities | $ 20 | $ 18 | $ 20 |
Shares excluded from the earnings (loss) per share calculation due to anti-dilutive effect on earnings per share | 2.9 | 2.8 | 1.7 |
STOCK-BASED COMPENSATION - STOCK OPTIONS AND RESTRICTED STOCK (Details) $ / shares in Units, shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025
USD ($)
$ / shares
shares
|
Feb. 03, 2024
$ / shares
shares
|
Jan. 28, 2023
$ / shares
shares
|
|
Stock Options Plans | |||
Common stock available for future grants (in shares) | shares | 29.0 | ||
Frequency of equity grants made | at one of four meetings of its Board of Directors | ||
Employee Stock Option | |||
Stock Options Plans | |||
Expiration period from date of grant | 10 years | ||
Share pool ratio | 1 | ||
Shares subject to option | |||
Outstanding at the beginning of the period (in shares) | shares | 15.4 | 16.6 | 21.1 |
Granted (in shares) | shares | 1.2 | 1.3 | 1.2 |
Exercised (in shares) | shares | (4.6) | (2.4) | (5.4) |
Canceled or Forfeited (in shares) | shares | (0.4) | (0.1) | (0.3) |
Outstanding at the end of the period (in shares) | shares | 11.6 | 15.4 | 16.6 |
Weighted-average exercise price | |||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 33.11 | $ 30.81 | $ 28.15 |
Granted (in dollars per share) | $ / shares | 55.5 | 47.23 | 56.13 |
Exercised (in dollars per share) | $ / shares | 29.75 | 24.04 | 26.02 |
Canceled or Forfeited (in dollars per share) | $ / shares | 45.79 | 39.45 | 31.54 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 36.25 | 33.11 | 30.81 |
Options Outstanding and Exercisable | |||
Options Outstanding, Weighted-average remaining contractual life (in years) | 4 years 10 months 9 days | ||
Options Outstanding, Aggregate intrinsic value | $ | $ 294 | ||
Options Exercisable, Number of shares | shares | 8.8 | ||
Options Exercisable, Weighted-average remaining contractual life (in years) | 3 years 10 months 2 days | ||
Options Exercisable, Weighted-average exercise price | $ / shares | $ 31.76 | ||
Options Exercisable, Aggregate intrinsic value | $ | $ 262 | ||
Options Expected to Vest | |||
Options Expected to Vest, Number of shares | shares | 2.7 | ||
Options Expected to Vest, Weighted-average remaining contractual life (in years) | 8 years 7 days | ||
Options Expected to Vest, Weighted-average exercise price | $ / shares | $ 50.14 | ||
Options Expected to Vest, Aggregate intrinsic value | $ | $ 31 | ||
Weighted-average grant-date fair value | |||
Weighted-average grant date fair value of stock options granted in period (in dollars per share) | $ / shares | $ 17.05 | $ 15.17 | $ 15.91 |
Weighted average assumptions for grants awarded to option holders | |||
Weighted average expected volatility | 30.63% | 31.14% | 30.47% |
Weighted average risk-free interest rate | 4.20% | 4.09% | 2.09% |
Expected dividend yield | 2.31% | 2.11% | 1.82% |
Expected term (based on historical results) | 7 years 1 month 6 days | 7 years 1 month 6 days | 7 years 2 months 12 days |
Employee Stock Option | Minimum | |||
Stock Options Plans | |||
Vesting period from date of grant | 1 year | ||
Employee Stock Option | Maximum | |||
Stock Options Plans | |||
Vesting period from date of grant | 4 years | ||
Restricted stock | |||
Stock Options Plans | |||
Share pool ratio | 2.83 | ||
Restricted shares outstanding | |||
Outstanding at the beginning of the period (in shares) | shares | 5.9 | 5.8 | 7.2 |
Granted (in shares) | shares | 3.2 | 3.5 | 3.0 |
Lapsed (in shares) | shares | (3.2) | (3.1) | (4.0) |
Canceled or Forfeited (in shares) | shares | (0.5) | (0.3) | (0.4) |
Outstanding at the end of the period (in shares) | shares | 5.4 | 5.9 | 5.8 |
Weighted-average grant-date fair value | |||
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 45.49 | $ 41.76 | $ 32.52 |
Granted (in dollars per share) | $ / shares | 53.29 | 47.06 | 50.5 |
Lapsed (in dollars per share) | $ / shares | 44.22 | 40.37 | 32.16 |
Canceled or Forfeited (in dollars per share) | $ / shares | 48.76 | 45.32 | 38.32 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 50.58 | $ 45.49 | $ 41.76 |
Restricted stock | Minimum | |||
Stock Options Plans | |||
Vesting period from date of grant | 1 year | ||
Restricted stock | Maximum | |||
Stock Options Plans | |||
Vesting period from date of grant | 4 years |
STOCK-BASED COMPENSATION - COMPENSATION AND VALUE (Details) - USD ($) shares in Millions, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
STOCK-BASED COMPENSATION | |||
Total stock compensation | $ 175 | $ 172 | $ 190 |
Stock option compensation | 15 | 17 | 19 |
Restricted shares compensation | 160 | 155 | 171 |
Total intrinsic value of stock options exercised | 117 | 55 | 159 |
Cash received from the exercise of options | 127 | 50 | 134 |
Compensation expenses related to non-vested share-based compensation arrangements | $ 204 | ||
Weighted-average period for recognition of expenses related to non-vested share-based compensation arrangements | 2 years | ||
Total fair value of options vested | $ 16 | $ 16 | $ 19 |
Common stock repurchase from proceeds of stock option exercises (in shares) | 3 |
COMMITMENTS AND CONTINGENCIES (Details) - Opioid Litigation - Settled litigation - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Sep. 08, 2023 |
Feb. 01, 2025 |
Feb. 03, 2024 |
|
Commitment and Contingencies | |||
Litigation settlement amount awarded to other party | $ 1,236 | ||
Litigation settlement amount awarded to other party for attorney fees | $ 177 | ||
Litigation settlement | $ 1,413 | ||
Litigation settlement, net | 1,113 | ||
Settlement payments, installments term | 11 years | ||
Payable for attorney's fees and cost, installments term | 6 years | ||
Annual payment included in prepaid and other current assets | $ 138 | ||
West Virginia | |||
Commitment and Contingencies | |||
Litigation settlement | 62 | ||
Other current liabilities | |||
Commitment and Contingencies | |||
Settlement amount payable to other party, including attorney fees | 279 | 284 | |
Other long-term liabilities | |||
Commitment and Contingencies | |||
Settlement amount payable to other party, including attorney fees | $ 1,139 | $ 1,129 | |
State and subdivision | |||
Commitment and Contingencies | |||
Litigation settlement amount awarded to other party | $ 1,200 | ||
Native American tribes | |||
Commitment and Contingencies | |||
Litigation settlement amount awarded to other party | $ 36 |
STOCK - PREFERRED SHARES, COMMON SHARES AND REPURCHASES (Details) $ / shares in Units, $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 19, 2024
USD ($)
item
|
Sep. 09, 2022
USD ($)
shares
|
Feb. 01, 2025
USD ($)
$ / shares
shares
|
Feb. 03, 2024
USD ($)
$ / shares
shares
|
Jan. 28, 2023
USD ($)
$ / shares
shares
|
Dec. 11, 2024
USD ($)
|
Dec. 30, 2021
USD ($)
|
|
Preferred Shares | |||||||
Preferred shares, shares authorized | shares | 5,000,000 | 5,000,000 | |||||
Preferred shares, shares available for issuance | shares | 2,000,000 | ||||||
Preferred shares, par per share (in dollars per share) | $ / shares | $ 100 | $ 100 | |||||
Common Shares | |||||||
Common shares, shares authorized | shares | 2,000,000,000 | 2,000,000,000 | |||||
Common shares, par per share (in dollars per share) | $ / shares | $ 1 | $ 1 | |||||
Common Stock Repurchase Program | |||||||
Repurchase share amount | $ 5,038 | $ 821 | |||||
December 2024 repurchase program | |||||||
Common Stock Repurchase Program | |||||||
Share repurchase authorized amount | $ 7,500 | $ 7,500 | |||||
Accelerated Share Repurchases, Number of financial institutions | item | 2 | ||||||
Repurchase share amount | $ 5,000 | ||||||
Amount funded for shares | 5,000 | ||||||
Amount received for shares | $ 4,000 | ||||||
Shares repurchased (in shares) | shares | 65,600,000 | ||||||
Accelerated Share Repurchases, initial average price per share | $ / shares | $ 61.54 | ||||||
Share repurchase remaining authorized amount | $ 2,500 | ||||||
Unsettled accelerated share repurchases | 1,000 | ||||||
September 2022 repurchase program | |||||||
Common Stock Repurchase Program | |||||||
Share repurchase authorized amount | $ 1,000 | ||||||
Shares repurchased during the period | shares | 0 | ||||||
December 2021 repurchase program | |||||||
Common Stock Repurchase Program | |||||||
Share repurchase authorized amount | $ 1,000 | ||||||
December 2024 and 1999 Repurchase Program | |||||||
Common Stock Repurchase Program | |||||||
Repurchase share amount | $ 4,194 | ||||||
Shares repurchased (in shares) | shares | 68,400,000 | ||||||
Average price per share repurchased | $ / shares | $ 61.31 | ||||||
1999 Repurchase Program | |||||||
Common Stock Repurchase Program | |||||||
Repurchase share amount | $ 62 | ||||||
Shares repurchased (in shares) | shares | 1,300,000 | ||||||
Average price per share repurchased | $ / shares | $ 46.98 | ||||||
December 2021 and 1999 repurchase program | |||||||
Common Stock Repurchase Program | |||||||
Repurchase share amount | $ 993 | ||||||
Shares repurchased (in shares) | shares | 19,400,000 | ||||||
Average price per share repurchased | $ / shares | $ 51.29 |
COMPANY- SPONSORED BENEFIT PLANS - AMOUNTS RECOGNIZED IN AOCI AND OTHER CHANGES IN OCI (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Amounts recognized in AOCI (pre-tax): | |||
Net actuarial loss (gain) | $ 771 | $ 725 | |
Prior service credit | (10) | (11) | |
Total | 761 | 714 | |
Other changes recognized in other comprehensive income (loss) (pre-tax): | |||
Incurred net actuarial loss | 42 | 46 | $ 116 |
Amortization of prior service credit | 4 | 11 | 13 |
Amortization of net actuarial (loss) gain | 1 | 3 | (20) |
Total recognized in other comprehensive income | 47 | 60 | 109 |
Total recognized in net periodic benefit cost and other comprehensive income | 45 | 51 | 83 |
Pension Benefits | |||
Amounts recognized in AOCI (pre-tax): | |||
Net actuarial loss (gain) | 850 | 817 | |
Total | 850 | 817 | |
Other changes recognized in other comprehensive income (loss) (pre-tax): | |||
Incurred net actuarial loss | 42 | 42 | 101 |
Amortization of net actuarial (loss) gain | (9) | (10) | (31) |
Total recognized in other comprehensive income | 33 | 32 | 70 |
Total recognized in net periodic benefit cost and other comprehensive income | 32 | 36 | 58 |
Other Benefits | |||
Amounts recognized in AOCI (pre-tax): | |||
Net actuarial loss (gain) | (79) | (92) | |
Prior service credit | (10) | (11) | |
Total | (89) | (103) | |
Other changes recognized in other comprehensive income (loss) (pre-tax): | |||
Incurred net actuarial loss | 4 | 15 | |
Amortization of prior service credit | 4 | 11 | 13 |
Amortization of net actuarial (loss) gain | 10 | 13 | 11 |
Total recognized in other comprehensive income | 14 | 28 | 39 |
Total recognized in net periodic benefit cost and other comprehensive income | $ 13 | $ 15 | $ 25 |
COMPANY- SPONSORED BENEFIT PLANS - FUNDED STATUS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | $ 44 | ||
Fair value of plan assets at end of fiscal year | 24 | $ 44 | |
Other assets | 24 | 44 | |
Other current liabilities | 36 | 36 | |
Pension Benefits | Qualified Plans | |||
Change in benefit obligation: | |||
Benefit obligations at beginning of fiscal year | 2,368 | 2,463 | |
Service cost | 6 | 17 | $ 8 |
Interest cost | 119 | 116 | 92 |
Plan participants' contributions | 3 | 4 | |
Actuarial (gain) loss | (62) | (42) | |
Plan settlements | (11) | ||
Benefits paid | (175) | (165) | |
Other | (9) | (14) | |
Benefit obligations at end of fiscal year | 2,250 | 2,368 | 2,463 |
Change in plan assets: | |||
Fair value of plan assets at beginning of fiscal year | 2,399 | 2,496 | |
Actual return on plan assets | 37 | 65 | |
Employer contributions | 27 | ||
Plan participants' contributions | 3 | 4 | |
Plan settlements | (11) | ||
Benefits paid | (175) | (165) | |
Other | (5) | (17) | |
Fair value of plan assets at end of fiscal year | 2,259 | 2,399 | 2,496 |
Funded (unfunded) status and net asset and liability recognized at end of fiscal year | 9 | 31 | |
Pension Benefits | Non-Qualified Plans | |||
Change in benefit obligation: | |||
Benefit obligations at beginning of fiscal year | 256 | 271 | |
Interest cost | 13 | 13 | 10 |
Actuarial (gain) loss | (5) | (3) | |
Plan settlements | (2) | (1) | |
Benefits paid | (21) | (24) | |
Benefit obligations at end of fiscal year | 241 | 256 | 271 |
Change in plan assets: | |||
Employer contributions | 23 | 26 | |
Plan settlements | (2) | (2) | |
Benefits paid | (21) | (24) | |
Funded (unfunded) status and net asset and liability recognized at end of fiscal year | (241) | (256) | |
Other Benefits | |||
Change in benefit obligation: | |||
Benefit obligations at beginning of fiscal year | 168 | 165 | |
Service cost | 4 | 4 | 5 |
Interest cost | 9 | 8 | 5 |
Plan participants' contributions | 9 | 9 | |
Actuarial (gain) loss | 2 | ||
Benefits paid | (23) | (21) | |
Other | (2) | 3 | |
Benefit obligations at end of fiscal year | 167 | 168 | $ 165 |
Change in plan assets: | |||
Employer contributions | 14 | 12 | |
Plan participants' contributions | 9 | 9 | |
Benefits paid | (23) | (21) | |
Funded (unfunded) status and net asset and liability recognized at end of fiscal year | $ (167) | $ (168) |
COMPANY- SPONSORED BENEFIT PLANS - ASSUMPTIONS (Details) |
12 Months Ended | |||
---|---|---|---|---|
Feb. 01, 2025 |
Dec. 31, 2024 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Pension Benefits | ||||
Weighted average assumptions used to determine pension benefits and other benefits | ||||
Discount rate - Benefit obligation (as a percent) | 5.60% | 5.27% | 4.90% | |
Discount rate - Net periodic benefit cost (as a percent) | 5.27% | 4.90% | 3.17% | |
Expected long-term rate of return on plan assets (as a percent) | 5.50% | 5.50% | 5.50% | |
Rate of compensation increase - Net periodic benefit cost (as a percent) | 2.52% | 2.57% | 3.05% | |
Rate of compensation increase - Benefit obligation (as a percent) | 2.52% | 2.57% | ||
Cash Balance plan interest crediting rate | 3.30% | 3.30% | 3.30% | |
Percentage increase (decrease) in value of all investments in Qualified Plans, net of investment management fees and expenses | 1.70% | 0.70% | ||
Pension plan's average rate of return for the 10 calendar years ended December 31, net of all investment management fees and expenses (as a percent) | 4.00% | |||
Measurement period for the pension plan's average annual rate of return, rate in calendar years | 10 years | |||
Number of years in which the Company average annual return rate has been at the current rate | 20 years | |||
Average annual rate of return for the past 20 years (as a percent) | 5.80% | |||
Period of recognition of gains or losses on plan assets | 5 years | |||
Other Benefits | ||||
Weighted average assumptions used to determine pension benefits and other benefits | ||||
Discount rate - Benefit obligation (as a percent) | 5.54% | 5.21% | 4.86% | |
Discount rate - Net periodic benefit cost (as a percent) | 5.21% | 4.86% | 3.01% |
COMPANY- SPONSORED BENEFIT PLANS - BENEFIT PAYMENTS (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
Pension Benefits | |||
Estimated future benefit payments | |||
2025 | $ 226 | ||
2026 | 213 | ||
2027 | 212 | ||
2028 | 210 | ||
2029 | 207 | ||
2030-2034 | $ 966 | ||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 100.00% | ||
Actual Allocations (as a percent) | 100.00% | 100.00% | |
Expected net period benefit costs next year | $ 13 | ||
Defined Benefit Plan, Assumed Health Care Cost Trend Rates | |||
Initial health care cost trend rate (as a percent) | 6.60% | ||
Ultimate health care cost trend rate (as a percent) | 4.00% | ||
Pension Benefits | Global equity securities | |||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 5.00% | ||
Actual Allocations (as a percent) | 6.50% | 5.40% | |
Pension Benefits | Investment grade debt securities | |||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 79.50% | ||
Actual Allocations (as a percent) | 79.10% | 78.90% | |
Pension Benefits | High yield debt securities | |||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 3.00% | ||
Actual Allocations (as a percent) | 3.50% | 3.10% | |
Pension Benefits | Private Equity | |||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 8.00% | ||
Actual Allocations (as a percent) | 7.50% | 8.50% | |
Pension Benefits | Hedge funds | |||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 3.00% | ||
Actual Allocations (as a percent) | 2.00% | 2.40% | |
Pension Benefits | Real estate | |||
Target and actual pension plan asset allocations | |||
Target allocations (as a percent) | 1.50% | ||
Actual Allocations (as a percent) | 1.40% | 1.70% | |
Pension Benefits | Qualified Plans | |||
Components of net periodic benefit cost: | |||
Service cost | $ 6 | $ 17 | $ 8 |
Interest cost | 119 | 116 | 92 |
Expected return on plan assets | (148) | (150) | (153) |
Amortization of: | |||
Actuarial loss (gain) | 7 | 5 | 22 |
Settlement loss recognized | 1 | 4 | |
Net periodic benefit cost | (16) | (11) | (27) |
Projected benefit obligation ("PBO"), accumulated benefit obligation ("ABO") and the fair value of plan assets for all Company-sponsored pension plans | |||
PBO at end of fiscal year | 196 | 159 | |
ABO at end of fiscal year | 196 | 159 | |
Fair value of plan assets at end of year | 180 | 150 | |
Pension Benefits | Non-Qualified Plans | |||
Components of net periodic benefit cost: | |||
Interest cost | 13 | 13 | 10 |
Amortization of: | |||
Actuarial loss (gain) | 2 | 4 | 5 |
Other | (2) | ||
Net periodic benefit cost | 15 | 15 | 15 |
Projected benefit obligation ("PBO"), accumulated benefit obligation ("ABO") and the fair value of plan assets for all Company-sponsored pension plans | |||
PBO at end of fiscal year | 240 | 256 | |
ABO at end of fiscal year | 240 | 256 | |
Other Benefits | |||
Components of net periodic benefit cost: | |||
Service cost | 4 | 4 | 5 |
Interest cost | 9 | 8 | 5 |
Amortization of: | |||
Prior service credit | (4) | (11) | (13) |
Actuarial loss (gain) | (10) | (13) | (11) |
Other | (1) | ||
Net periodic benefit cost | (1) | $ (13) | $ (14) |
Estimated future benefit payments | |||
2025 | 13 | ||
2026 | 15 | ||
2027 | 16 | ||
2028 | 16 | ||
2029 | 17 | ||
2030-2034 | $ 83 |
COMPANY- SPONSORED BENEFIT PLANS - FAIR VALUE OF PLAN ASSETS (Details) - USD ($) $ in Millions |
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
---|---|---|---|
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | $ 24 | $ 44 | |
Fair Value, Recurring | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 2,259 | 2,399 | |
Fair Value, Recurring | Cash and cash equivalents | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 129 | 151 | |
Fair Value, Recurring | Corporate Stocks | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 2 | 2 | |
Fair Value, Recurring | Corporate Bonds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 847 | 1,092 | |
Fair Value, Recurring | U.S. Government Securities | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 151 | 140 | |
Fair Value, Recurring | Mutual Funds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 92 | 108 | |
Fair Value, Recurring | Collective Trusts | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 737 | 513 | |
Fair Value, Recurring | Hedge Funds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 45 | 58 | |
Fair Value, Recurring | Private Equity | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 166 | 203 | |
Fair Value, Recurring | Real Estate | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 33 | 39 | |
Fair Value, Recurring | Other Investments | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 57 | 93 | |
Level 1 | Fair Value, Recurring | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 223 | 261 | |
Level 1 | Fair Value, Recurring | Cash and cash equivalents | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 129 | 151 | |
Level 1 | Fair Value, Recurring | Corporate Stocks | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 2 | 2 | |
Level 1 | Fair Value, Recurring | Mutual Funds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 92 | 108 | |
Level 2 | Fair Value, Recurring | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 1,055 | 1,325 | |
Level 2 | Fair Value, Recurring | Corporate Bonds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 847 | 1,092 | |
Level 2 | Fair Value, Recurring | U.S. Government Securities | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 151 | 140 | |
Level 2 | Fair Value, Recurring | Other Investments | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 57 | 93 | |
Level 3 | Fair Value, Recurring | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 45 | 53 | |
Level 3 | Fair Value, Recurring | Hedge Funds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 25 | 29 | $ 31 |
Level 3 | Fair Value, Recurring | Real Estate | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 20 | 24 | $ 28 |
Assets Measured at NAV | Fair Value, Recurring | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 936 | 760 | |
Assets Measured at NAV | Fair Value, Recurring | Collective Trusts | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 737 | 513 | |
Assets Measured at NAV | Fair Value, Recurring | Hedge Funds | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 20 | 29 | |
Assets Measured at NAV | Fair Value, Recurring | Private Equity | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | 166 | 203 | |
Assets Measured at NAV | Fair Value, Recurring | Real Estate | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Fair value of plan assets | $ 13 | $ 15 |
COMPANY- SPONSORED BENEFIT PLANS - LEVEL 3 RECONCILIATION (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
|
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | $ 44 | |
Fair value of plan assets at end of fiscal year | 24 | $ 44 |
Fair Value, Recurring | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | 2,399 | |
Fair value of plan assets at end of fiscal year | 2,259 | 2,399 |
Fair Value, Recurring | Level 3 | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | 53 | |
Fair value of plan assets at end of fiscal year | 45 | 53 |
Hedge Funds | Fair Value, Recurring | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | 58 | |
Fair value of plan assets at end of fiscal year | 45 | 58 |
Hedge Funds | Fair Value, Recurring | Level 3 | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | 29 | 31 |
Realized gains | 2 | 1 |
Unrealized gains (losses) | (1) | 1 |
Distributions | (5) | (4) |
Fair value of plan assets at end of fiscal year | 25 | 29 |
Real Estate | Fair Value, Recurring | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | 39 | |
Fair value of plan assets at end of fiscal year | 33 | 39 |
Real Estate | Fair Value, Recurring | Level 3 | ||
Roll-forward of assets measured at fair value using Level 3 inputs | ||
Fair value of plan assets at beginning of fiscal year | 24 | 28 |
Contributions into fund | 2 | 1 |
Realized gains | (4) | |
Unrealized gains (losses) | 2 | (3) |
Distributions | (4) | (2) |
Fair value of plan assets at end of fiscal year | $ 20 | $ 24 |
COMPANY- SPONSORED BENEFIT PLANS - DEFINED CONTRIBUTION PLAN INFORMATION (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
COMPANY- SPONSORED BENEFIT PLANS | |||
Contribution to 401(k) retirement savings accounts | $ 328 | $ 322 | $ 315 |
MULTI-EMPLOYER PENSION PLANS (Details) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025
USD ($)
item
|
Feb. 03, 2024
USD ($)
|
Jan. 28, 2023
USD ($)
|
|
Other Health And Welfare Benefits Multiemployer Plans | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 1,228 | $ 1,182 | $ 1,129 |
Pension Benefits | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 398 | 635 | 620 |
Charge (before-tax) related to pension plan agreements | 25 | ||
Charge (after-tax) related to pension plan agreements | 19 | ||
Pension Benefits | Red zone | Maximum | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Percentage of funded status | 65.00% | ||
Pension Benefits | Yellow zone | Maximum | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Percentage of funded status | 80.00% | ||
Pension Benefits | Green zone | Minimum | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Percentage of funded status | 80.00% | ||
Pension Benefits | SO CA UFCW Unions & Food Employers Joint Pension Trust Fund | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 84 | 83 | 84 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 1 | ||
Pension Benefits | Desert States Employers & UFCW Unions Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 19 | 19 | 20 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 1 | ||
Pension Benefits | Sound Variable Annuity Pension Trust | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 15 | 15 | 14 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 4 | ||
Pension Benefits | Rocky Mountain UFCW Unions and Employers Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 27 | 27 | 27 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 1 | ||
Pension Benefits | Oregon Retail Employees Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 11 | 10 | 9 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 2 | ||
Pension Benefits | Bakery and Confectionary Union & Industry International Pension Fund | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 8 | 7 | 7 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 3 | ||
Pension Benefits | Retail Food Employers & UFCW Local 711 Pension | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 11 | 11 | 11 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 1 | ||
Pension Benefits | UFCW International Union - Industry Variable Annuity Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 33 | 263 | 282 |
Most significant collective bargaining agreements count | item | 2 | ||
Pension Benefits | Western Conference of Teamsters Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 44 | 39 | 40 |
Most significant collective bargaining agreements count | item | 4 | ||
Pension Benefits | Central States, Southeast & Southwest Areas Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 57 | 40 | 34 |
Pension Benefits | UFCW Consolidated Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 70 | 98 | 56 |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 2 | ||
Pension Benefits | IBT Consolidated Pension Plan | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | 7 | 7 | |
Minimum percentage of total contributions received by pension fund | 5.00% | ||
Most significant collective bargaining agreements count | item | 3 | ||
Pension Benefits | Other | |||
COMPANY- SPONSORED BENEFIT PLANS | |||
Employer contribution to multi-employer plans | $ 19 | $ 16 | $ 29 |
SEGMENT REPORTING (Details) |
12 Months Ended |
---|---|
Feb. 01, 2025
segment
| |
SEGMENT REPORTING | |
Company's retail operations (as a percent) | 98.00% |
Number of segments | 1 |
SEGMENT REPORTING - RETAIL OPERATIONS SEGMENT (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Feb. 01, 2025 |
Feb. 03, 2024 |
Jan. 28, 2023 |
|
SEGMENT REPORTING | |||
Sales | $ 147,123 | $ 150,039 | $ 148,258 |
Merchandise costs | 113,720 | 116,675 | 116,480 |
Operating, general and administrative | 25,431 | 26,252 | 23,848 |
Rent | $ 877 | $ 891 | $ 839 |
Segment Reporting, Other Segment Item, Composition, Description | Other sales and other FIFO EBITDA primarily include other operating segments that are not part of the retail operations segment such as third-party media revenue, data analytic services, specialty pharmacy and in-store health clinics | Other sales and other FIFO EBITDA primarily include other operating segments that are not part of the retail operations segment such as third-party media revenue, data analytic services, specialty pharmacy and in-store health clinics | Other sales and other FIFO EBITDA primarily include other operating segments that are not part of the retail operations segment such as third-party media revenue, data analytic services, specialty pharmacy and in-store health clinics |
Depreciation and amortization | $ (3,246) | $ (3,125) | $ (2,965) |
LIFO charge | (95) | (113) | (626) |
Net Interest expense | (450) | (441) | (535) |
Non-service component of company-sponsored pension plan benefits | 12 | 30 | 39 |
(Loss) gain on investments | (148) | 151 | (728) |
Gain on sale of business | 79 | ||
Net earnings before income tax expense | 3,342 | 2,836 | 2,902 |
Retail operations segment | |||
SEGMENT REPORTING | |||
Sales | 143,947 | 145,701 | 143,751 |
Merchandise costs | 103,024 | 104,609 | 104,403 |
Expenses in gross | 8,655 | 8,813 | 8,062 |
Operating, general and administrative | 24,935 | 25,699 | 23,297 |
Rent | 866 | 879 | 826 |
FIFO EBITDA | 6,467 | 5,701 | 7,163 |
Other operations segments | |||
SEGMENT REPORTING | |||
Sales | 3,176 | 4,338 | 4,507 |
FIFO EBITDA | $ 723 | $ 633 | $ 554 |
SALE OF KROGER SPECIALTY PHARMACY (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Oct. 04, 2024 |
Feb. 01, 2025 |
|
SALE OF KROGER SPECIALTY PHARMACY | ||
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 464 | |
Gain on the sale of business | 79 | |
Kroger Specialty Pharmacy Business Disposal | Disposal Group, Not Discontinued Operations | ||
SALE OF KROGER SPECIALTY PHARMACY | ||
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 464 | |
Gain on the sale of business | 79 | |
Gain on sale of business, net of tax | 91 | |
Reduction to income tax expense | $ 31 |
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. (Details) $ / shares in Units, $ in Millions |
Dec. 18, 2024 |
Apr. 12, 2024
USD ($)
|
Nov. 09, 2022
USD ($)
|
Oct. 13, 2022
USD ($)
$ / shares
|
Feb. 01, 2025
USD ($)
|
Dec. 11, 2024
USD ($)
|
Dec. 10, 2024
USD ($)
|
Aug. 20, 2024
USD ($)
|
Aug. 15, 2024
USD ($)
|
Feb. 26, 2024
state
|
---|---|---|---|---|---|---|---|---|---|---|
SMR Notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 10,500 | $ 10,500 | ||||||||
Redemption price of principal amount (as percentage) | 101.00% | |||||||||
2026 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 1,000 | |||||||||
Interest rate (as a percent) | 4.70% | |||||||||
2027 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 1,000 | |||||||||
Interest rate (as a percent) | 4.60% | |||||||||
2029 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 1,400 | |||||||||
Interest rate (as a percent) | 4.65% | |||||||||
2031 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 1,300 | |||||||||
Interest rate (as a percent) | 4.90% | |||||||||
2034 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 2,200 | |||||||||
Interest rate (as a percent) | 5.00% | |||||||||
2054 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 2,100 | |||||||||
Interest rate (as a percent) | 5.50% | |||||||||
2064 notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 1,500 | |||||||||
Interest rate (as a percent) | 5.65% | |||||||||
ACI Notes | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Exchange offer | $ 7,442 | |||||||||
Albertsons | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Conversion share price | $ / shares | $ 34.1 | |||||||||
Special cash dividend payable | $ / shares | 6.85 | |||||||||
Expected adjusted cash purchase price | $ / shares | $ 27.25 | |||||||||
Number states joining suit to block merger | state | 9 | |||||||||
Obligation to pay the Parent Termination fee due to failed covenants | $ 0 | |||||||||
Termination fee if merger agreement is terminated | $ 600 | |||||||||
Albertsons | Senior unsecured bridge term loan facility | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt term | 364 days | |||||||||
Maximum borrowing capacity | $ 10,650 | $ 12,650 | $ 17,400 | |||||||
Reduction in facility amount | $ 2,000 | 4,750 | ||||||||
Albertsons | Senior unsecured term loan facility | Maturing on the third anniversary of the merger closing date | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt face amount | $ 3,000 | |||||||||
Albertsons | Senior unsecured term loan facility | Maturing on the date that is 18 months after the merger closing date | ||||||||||
TERMINATION OF THE MERGER WITH ALBERTSONS COMPANIES, INC. | ||||||||||
Debt term | 18 months | |||||||||
Debt face amount | $ 1,750 |