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The Kroger Company

The Kroger Company. Module9. Kroger. 343,000 Employees Headquarter in Cincinnati Primary store is “combo store” (supermarket) Multi-department (Fred-Meyer), Marketplace, Price Impact Stores (Food for Less) as well Last Saturday in January Comparables are Whole Foods, Costco, Walmart.

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The Kroger Company

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  1. The Kroger Company Module9

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

  3. Trouble So Far -Got my numbers all to match for RI, FCF, and ABNI -Kroger has specific business model -Stock price around $43 right now -10-K comes out any day -Acquisition heavy in the past few years

  4. Rumors • -Seems as though Kroger is not going to be acquiring Safeway • -Interesting discussions with Attorney General right now • -Expansion targeting in store sales • -Also looking into Texas and building some stores up in Michigan right now

  5. Cost of Equity Calculation • -no preferred • Stock • -little cash

  6. Growth Calculations and Value Line

  7. Forecasting Growth

  8. Dividend Discount Model

  9. Residual Income Equity Calc

  10. Conclusion • -Grocery Stores are much harder to compare than I originally thought • -Enterprise value could really increase with Harris Teeter deal and debt taken on • -Finding companies with similar characteristics besides just the leaders in market cap is what seems to be important for valuation purposes • -Based on valuations I recommend a BUY • -Is debt a concern moving forward based on business model?

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