Kroger (KR) 10-K risk factor changes: FY2024 vs FY2022

The proposed transaction with Albertsons [added: and the divestiture plan] entails important risks, including, among others: the expected timing and likelihood of completion of the proposed [removed: transaction,] [added: transaction and divestiture plan,] including the timing, receipt and terms and conditions of any required governmental and regulatory clearance of the proposed [removed: transaction; the effect and terms] [added: transaction] and [removed: conditions of any potential divestitures, including those that may be imposed by regulators as a condition to the approval] [added: divestiture plan, and/or resolution] of [added: pending litigation challenging] the [removed: proposed transaction, and/or] [added: merger;] the [removed: separation] [added: effect] of [removed: SpinCo (as described in] the [removed: merger agreement);] [added: proposed divestiture plan;] the occurrence of any event, change or other circumstances that could give rise to the termination of the merger [added: agreement or divestiture] agreement; the outcome of any legal proceedings that have been instituted and may in the future be instituted against the parties and others following announcement of the merger agreement and proposed [removed: transaction;] [added: transaction or divestiture plan;] the inability to consummate the proposed transaction [added: or divestiture plan] due to the failure to satisfy other conditions to complete the proposed [removed: transaction;] [added: transaction or divestiture plan;] risks that the proposed transaction [added: or divestiture plan] disrupts our current plans and operations; the ability to identify and recognize, including on the expected timeline, the anticipated total shareholder return (“TSR”), revenue and EBITDA expectations; the amount of the costs, fees, expenses and charges related to the proposed [removed: transaction;] [added: transaction or divestiture plan;] the risk that transaction and/or integration costs are greater than expected, including as a result of conditions regulators put on any approvals of the transaction; the potential effect of the announcement and/or consummation of the proposed transaction [added: or divestiture plan] on relationships, including with associates, suppliers and competitors; our ability to maintain an investment grade credit rating; the risk that management’s attention is diverted from other matters; risks related to the potential effect of general economic, political and market factors, including changes in the financial markets as a result of inflation or measures implemented to address inflation, and any epidemic, pandemic or disease outbreaks, on Kroger, Albertsons or the proposed [removed: transaction;] [added: transaction or divestiture plan;] the risk of adverse effects on the market price of our or Albertsons’s securities or on Albertsons’s or [removed: the Company’s] [added: our] operating results for any reason; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger [added: agreement or divestiture] agreement; and other risks described in our filings with the SEC.

Achieving the anticipated or desired benefits may be subject to a number of significant challenges and uncertainties, including, without limitation, whether unique corporate cultures will work collaboratively in an efficient and effective manner, the coordination of geographically separate organizations, the possibility of imprecise assumptions underlying expectations regarding potential synergies, capital requirements, and the integration [removed: process,] [added: process (including the integration of internal controls into our business operations),] unforeseen expenses and [removed: delays,] [added: delays] and competitive factors in the marketplace.

The operating environment for the food retailing industry continues to be characterized by the [removed: fragmentation] [added: proliferation] of local, regional, and national retailers, including both retail and digital formats, [added: and] intense [added: and ever-increasing] competition [added: ranging from online retailers, mass merchant, club stores, regional chains, deep discounters,] and [removed: entry of non-traditional competitors.][added: dollar stores, as well as ethnic, specialty and natural food stores.]

[removed: We see three major trends shaping the industry:] [added: The industry continues to be shaped by] e-commerce, cooking at home and prepared foods to [removed: go.][added: go and other customer needs and preferences.]

If we do not appropriately or accurately anticipate customer preferences or fail to quickly adapt to these [removed: changing] [added: ever-changing] preferences, [removed: or if trends shift more quickly to food away from home,] our sales and profitability could be adversely affected.

Each of these [removed: are] strategies [added: is] designed to better serve our customers and to generate customer loyalty and sustainable growth momentum.

Our ecosystem monetizes the traffic and data insights generated by our retail [removed: supermarket] [added: grocery] business to create fast-growing, asset-light and [removed: margin rich] [added: margin-rich] revenue streams.

In addition, evolving customer preferences and the advancement of online, delivery, ship to [removed: home,] [added: home] and mobile channels in our industry increase the competitive environment.

If we are not successful in reducing or offsetting the cost of fulfilling orders outside of our [removed: traditional] in-store channel with efficiencies, cost-savings, expense reductions, or alternative revenues, our financial condition, results of operations or cash flows could be adversely affected.

We must compete by offering a convenient shopping experience for our customers regardless of how they choose to shop with us, and by investing [removed: in,] [added: in] providing and maintaining relevant customer-facing apps and interfaces that have the features customers want that are also reliable and easy to use.

The future success of the digital business will also depend on the efficiency and cost effectiveness of fulfilling orders across our modalities, whether in store, in pickup-only [removed: locations,] [added: locations] or through customer fulfillment centers powered by Ocado.

Any issue regarding the safety of items, whether _Our Brands_ items manufactured by [removed: the Company] [added: us] or for [removed: the Company] [added: us] or CPG products we sell, regardless of the cause, could have a substantial and adverse effect on our reputation, financial condition, results of operations or cash flows.

[removed: A majority] [added: Nearly two-thirds] of our associates are covered by collective bargaining agreements with unions, and our relationship with those unions, including a prolonged work stoppage affecting a substantial number of locations, could have a material adverse effect on our financial condition, results of operations or cash flows.

We are a party to approximately [removed: 310] [added: 350] collective bargaining agreements.

Changes to wage regulations, including further increases in the minimum wage [removed: and extra pay] [added: or] ordinances [added: related to pay or working conditions] enacted by local governments, could have an [removed: impact] [added: effect] on our future financial condition, results of operations or cash flows.

[removed: There is no assurance that we will] [added: We may not] be able to attract or retain sufficient highly qualified associates in the future, which could have a material adverse effect on our business, financial condition, results of operations or cash flows.

Cyber-attackers have targeted and accessed, and may in the future again target and, if successful, [removed: access,] [added: access] information stored in our or our vendors’ systems in order to misappropriate confidential customer or business information.

Due to [removed: the] ongoing [removed: war between Russia and Ukraine,] [added: geopolitical conflicts,] there is an increased possibility of cyberattacks that could either directly or indirectly affect our operations.

If we, our [removed: third party] [added: third-party] service providers, or those with whom we share information fail to comply with laws and regulations, or self-regulatory regimes, that apply to all or parts of our business, such as section 5 of the FTC Act, the California Consumer Privacy Act (CCPA), the Health Insurance Portability and Accountability Act (HIPAA), or applicable international laws such as the EU General Data Protection Regulation (GDPR), our reputation could be damaged, possibly resulting in lost business, and we could be subjected to additional legal risk or financial losses as a result of non-compliance.

We sell a significant amount of fuel in our [removed: 1,637] [added: 1,665] fuel centers, which could face increased regulation, including due to climate change or other environmental concerns, and demand could be affected by concerns about the effect of emissions on the environment as well as retail price increases.

We are unable to predict future regulations, environmental effects, political unrest, acts of war or terrorism, disruptions to the economy, including but not limited to [removed: the COVID-19 pandemic, the war between Russia] [added: pandemics] and [removed: Ukraine,] [added: other health crises, geopolitical conflicts] and other matters that affect the cost and availability of fuel, and how our customers will react to such factors, which could adversely affect our financial condition, results of operations or cash flows.

Our operating results could be materially affected by changes in overall economic conditions and other economic factors that [removed: impact] [added: affect] consumer confidence and spending, including discretionary spending.

Future economic conditions affecting disposable consumer income such as employment levels, business conditions, overall economic slowdown or recession, changes in housing market conditions, changes in government benefits such as [removed: SNAP/EBT] [added: SNAP/EBT, student loan relief,] or child care credits, the availability of credit, interest rates, [removed: inflation] [added: inflation, disinflation] or deflation, tax rates and other matters could reduce consumer spending.

[removed: While our operations have generally stabilized since the peak of the pandemic, we] [added: We] cannot predict with certainty the extent that our operations may [removed: continue to] be [removed: impacted] [added: affected] by any [removed: continuing] effects of [removed: COVID-19] [added: the foregoing] on us or on our customers, suppliers, vendors, and other business partners, and each of their financial conditions; however, any adverse effect on these parties could materially and adversely [removed: impact] [added: affect] us.

To the extent that [removed: COVID-19 continues to affect] [added: any health crisis affects] the U.S. and global economy and our business, it may also heighten other risks described in this section, including but not limited to those related to consumer behavior and expectations, competition, implementation of strategic initiatives, cybersecurity threats, payment-related risks, supply chain disruptions, labor availability and cost, litigation and operational risk as a result of regulatory requirements.

These and other rapidly changing laws, regulations, policies and related interpretations, as well as increased enforcement actions by various governmental and regulatory agencies, create challenges for [removed: the Company,] [added: us,] may alter the environment in which we do business and may increase the ongoing costs of compliance, which could adversely affect our financial condition, results of operations and cash flows.

In addition, increasing governmental and societal attention to environmental, social, and governance [removed: (ESG)] [added: (“ESG”)] matters, including expanding voluntary reporting, diligence, and disclosure on topics such as climate change, waste production, water usage, human capital, labor, and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess, and report and could negatively affect [removed: the Company’s] [added: our] reputation.

[removed: Adverse weather, natural disasters, geopolitical] [added: Geopolitical] and catastrophic events, such as [removed: war,] [added: wars and conflicts,] civil unrest, acts of terrorism or other acts of violence, including active shooter situations (which have occurred in the past at our locations), or [removed: pandemics, such as] the [removed: spread] [added: loss] of [removed: COVID-19,] [added: merchandise as a result of shrink] or [removed: other future] [added: industry-wide theft and organized retail crime, or] pandemics [added: or other health crises,] and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.

These changes could over time affect, for example, the availability and cost of products, commodities and energy including utilities, which in turn may [removed: impact] [added: affect] our ability to procure goods or services required for the operation of our business at the quantities and levels we require.

These events and their [removed: impacts] [added: effects] could otherwise disrupt and adversely affect our operations and could have an adverse effect on our financial condition, results of operations or cash flows.

The loss or disruption of such supply arrangements for any reason, labor disputes, loss or impairment of key manufacturing sites, acts of war or terrorism, disruptive global political events, [removed: such as the ongoing war between Russia and Ukraine,] quality control issues, a supplier’s financial distress, natural disasters or health crises, [removed: including the COVID-19 pandemic,] regulatory actions or ethical sourcing issues, trade sanctions or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have an adverse effect on our business, financial condition, results of operations or cash flows.

In connection with the proposed transaction, Kroger and Albertsons entered into a comprehensive divestiture plan with C&S Wholesale Grocers, LLC for the combined sale of certain stores, distribution centers, offices and private label brands.

With the proliferation of grocery delivery – both by retailers and third-party delivery service providers – customers have an even wider range of retailers from which to choose.

Customers continue to expect a great shopping experience both in-store and online.

Customers want to be able to shop on their own terms with zero compromise whether at brick and mortar stores or online, pick-up or delivery, depending on their particular trip needs and other factors.

Growth in loyal households, customer traffic and digitally engaged customers allow us to grow profits and power the flywheel in our model.

Our operating results could be adversely affected by any future disease outbreak, including pandemics, epidemics, or similar widespread health concerns.

Given our commitment to our ESG strategy, we have established and publicly announced certain goals which we may refine or even expand further in the future.

The execution of this strategy to achieve these goals is subject to risks and uncertainties, many of which may be outside of our control and prove to be more costly than we anticipate.

These risks and uncertainties include, but are not limited to, our ability to achieve our goals within the currently projected costs and the expected timeframes; unforeseen operational and technological difficulties; the outcome of research efforts and future technology developments; and the success of our collaborations with and reliance on third parties.

Any failure, or perceived failure, to achieve these goals or the setting or publication of certain targets could damage our reputation and customer, investor and other stakeholder relationships, and may even result in regulatory enforcement action.

Such conditions could have an adverse effect on our business, financial condition, results of operations or cash flows.

Adverse weather or natural disasters and other matters that could reduce consumer spending, could materially affect our financial condition, results of operations or cash flows.

Customer behavior shifted quickly and considerably during the pandemic, including a shift from food away from home to food at home.

Our digital business accelerated significantly during the COVID-19 pandemic.

COVID-19

COVID-19 has impacted and may continue to impact our business, including our supply chain, store operations and merchandising functions, as well as our associates.

MD&A is provided as a supplement to, and should be read in conjunction with, our Consolidated Financial Statements and the accompanying notes thereto contained in Item 8 of this report, as well as Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the year ended January [removed: 29, 2022,] [added: 28, 2023,] which provides additional information on comparisons of fiscal years [removed: 2021] [added: 2022] and [removed: 2020.][added: 2021.]

The foundation of our value creation model is our omnichannel [removed: food] retail business, [removed: which is built on Kroger’s strategic assets: our stores, digital ecosystem, _Our Brands_] [added: including fuel] and [removed: our data.][added: health and wellness.]

| | ● | Growing identical sales without fuel. Our plan involves maximizing growth opportunities in our [removed: supermarket] [added: retail] business and is supported by continued strategic investments in our [removed: customers,] associates, [added: greater value for our customers] and our seamless ecosystem to ensure we deliver a full, [removed: friendly and] fresh [added: and friendly] experience for every customer, every time. As more and more customers incorporate ecommerce into their permanent routines, we expect digital sales to grow at a double-digit rate – a faster pace than other food at home sales – over time; and |

[removed: 2022] [added: 2023] EXECUTIVE SUMMARY

| [removed: ​] [added: ​] | [removed: ​] [added: ​] | [added: 2023 | | ​ | Adjusted(1) | | ​ | Change(2) | ​ |] 2022 | | ​ | [removed: Change] [added: Change(3)] | ​ | 2021 | | ​ |

| [removed: Sales] [added: Total sales] | ​ | $ | [added: 150,039 | ​ | $ | 147,328 | ​ | (0.6) | % | $ |] 148,258 | ​ | 7.5 | % | $ | 137,888 | ​ |

| Net earnings attributable to The Kroger Co. | ​ | $ | [removed: 2,244] [added: 2,164] | ​ | [removed: 35.6] [added: $] | [removed: %] [added: 2,244] | [added: ​ |] $ | 1,655 | ​ |

| [removed: Adjusted net] [added: Net] earnings attributable to The Kroger Co. [added: excluding the Adjusted Items] | ​ | $ | [removed: 3,104] [added: 3,479] | ​ | [removed: 10.8] [added: $] | [removed: %] [added: 3,104] | [added: ​ |] $ | 2,802 | ​ |

| Net earnings attributable to The Kroger Co. per diluted common share | ​ | $ | [removed: 3.06] [added: 2.96] | ​ | [removed: 41.0] [added: $] | [removed: %] [added: 3.06] | [added: ​ |] $ | 2.17 | ​ |

| [removed: Adjusted net] [added: Net] earnings attributable to The Kroger Co. per diluted common share [added: excluding the Adjusted Items] | ​ | $ | [removed: 4.23] [added: 4.76] | ​ | [removed: 14.9] [added: $] | [removed: %] [added: 4.23] | [added: ​ |] $ | 3.68 | ​ |

| Operating profit | ​ | $ | [removed: 4,126] [added: 3,096] | ​ | [removed: 18.7 | % |] $ | [removed: 3,477] [added: 4,126] | ​ |

| Adjusted FIFO operating profit [added: excluding the adjusted items above] | ​ | $ | [removed: 5,079] [added: 4,986] | ​ | [removed: 17.8 | % |] $ | [removed: 4,310] [added: 5,079] | ​ |

| Dividends paid | ​ | $ | [removed: 682] [added: 796] | ​ | [removed: 15.8] [added: 16.7] | % | $ | [removed: 589] [added: 682] | ​ |

| Dividends paid per common share | ​ | $ | [removed: 0.94] [added: 1.10] | ​ | [removed: 20.5] [added: 17.0] | % | $ | [removed: 0.78] [added: 0.94] | ​ |

| Identical sales excluding [removed: fuel] [added: fuel(1)] | ​ | ​ | [removed: 5.6] [added: 0.9] | % | N/A | ​ | ​ | [removed: 0.2] [added: 5.6] | % |

| FIFO gross margin rate, excluding [removed: fuel,] [added: fuel and the Extra Week,] bps [removed: decrease] [added: increase (decrease)(1)] | ​ | ​ | [removed: (0.09)] [added: 0.18] | ​ | N/A | ​ | ​ | [removed: (0.43)] [added: (0.09)] | ​ |

| OG&A rate, excluding [removed: fuel and] [added: fuel,] Adjusted [removed: Items,] [added: Items and the Extra Week,] bps [removed: decrease] [added: increase (decrease)(1)] | ​ | ​ | [removed: 0.19] [added: 0.21] | ​ | N/A | ​ | ​ | [removed: 0.61] [added: (0.19)] | ​ |

| [removed: Increase (decrease)] [added: (Decrease)/increase] in total debt, including obligations under finance leases compared to prior fiscal year end | ​ | $ | [removed: 14] [added: (1,152)] | ​ | N/A | ​ | $ | [removed: (49)] [added: 14] | ​ |

| Share repurchases | ​ | $ | [removed: 993] [added: 62] | ​ | N/A | ​ | $ | [removed: 1,647] [added: 993] | ​ |

Notable items for [removed: 2022] [added: 2023] are:

| | ● | Achieved [added: adjusted] net earnings attributable to The Kroger Co. per diluted common share [added: excluding the Extra Week] of [removed: $3.06,] [added: $4.56,] which represents [removed: a 41%] [added: an 8%] increase compared to [removed: 2021.] [added: 2022. Including the Extra Week, adjusted net earnings per diluted common share increased 13% compared to 2022.] |

| [removed: | ● | Achieved adjusted net] [added: Net] earnings attributable to The Kroger Co. per diluted common share [removed: of $4.23, which represents a 15% increase compared to 2021.] | [added: ​ | $ | 2.96 | ​ | (3.3) | % | $ | 3.06 | ​ |]

| | ● | Achieved adjusted FIFO operating profit [added: excluding the Extra Week] of [removed: $5.1] [added: $4.8] billion, which represents [removed: an 18% increase] [added: a 6% decrease] compared to [removed: 2021.] [added: 2022. Including the Extra Week, adjusted FIFO operating profit decreased 2% compared to 2022.] |

[removed: | | ● | Generated] [added: We generated $6.8 billion of] cash [removed: flows] from operations [removed: of] [added: in 2023, compared to] $4.5 [removed: billion. |][added: billion in 2022.]

| | ● | Identical sales, excluding fuel, increased [removed: 5.6%, which included identical sales growth in _Our Brands_ categories of 9.0%.] [added: 0.9%.] Identical sales, excluding fuel, would have grown [removed: 5.8%] [added: 2.3%] in [removed: 2022] [added: 2023] if not for the reduction in pharmacy sales from our termination of our agreement with Express Scripts effective December 31, 2022. This terminated agreement had no material effect on profitability. |

| | ● | Digital sales [added: grew to $12 billion in annual sales. Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions. Excluding the Extra Week, digital sales] increased [removed: 4%,] [added: 12%,] which was led by strength in our Delivery solutions, which grew by 25%. Delivery solutions growth was driven by our Boost membership program and expansion of our Kroger Delivery network. [removed: Digital sales include products ordered online and picked up at our stores and our Delivery and Ship solutions.] Our Delivery solutions include orders delivered to customers from retail store locations, customer fulfillment centers powered by Ocado and orders placed through third-party platforms. Our Ship solutions primarily include online orders placed through our owned platforms that are dispatched using mail service or third-party courier. |

We also utilize the data and traffic generated by our retail business to deliver incremental value and services for our customers that [removed: generates] [added: generate] alternative profit streams.

As of [removed: January 28, 2023,] [added: February 3, 2024,] Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia.

As of [removed: January 28, 2023,] [added: February 3, 2024,] Kroger operated, either directly or through its subsidiaries, [removed: 2,719] [added: 2,722] supermarkets, of which [removed: 2,252] [added: 2,257] had pharmacies and [removed: 1,637] [added: 1,665] had fuel centers.

We offer Pickup and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at [removed: 2,274] [added: 2,350] of our supermarkets and provide Delivery, which allows us to offer digital solutions to substantially all of our customers.

Our Delivery solutions include orders delivered to customers from retail store [removed: locations and] [added: locations,] customer fulfillment centers powered by [removed: Ocado.][added: Ocado and orders placed through third-party platforms.]

_Our Brands_ products play an important role in our merchandising strategy and represented over [removed: $30] [added: $31] billion of our sales in [removed: 2022.][added: 2023.]

We [removed: operate] [added: own] 33 food production plants, primarily bakeries and dairies, which supply approximately 30% of _Our Brands_ units and [removed: 42%] [added: 43%] of the grocery category _Our Brands_ units sold in our supermarkets; the remaining _Our Brands_ items are produced to our strict specifications by outside manufacturers.

We are evolving [removed: from a traditional food retailer] into a more [removed: diverse, food first] [added: diverse] business.

The traffic and data generated by our retail [removed: supermarket] business, including pharmacies and fuel centers, is enabling this transformation.

Kroger serves approximately [removed: 60] [added: 62] million households annually and because of our rewards program, over [removed: 90%] [added: 95%] of customer transactions are tethered to a Kroger loyalty card.

Our 20 years of investment in data science capabilities is allowing us to utilize this data to create personalized experiences and value for our customers and is also enabling our fast-growing, high operating margin alternative profit businesses, including data analytic services and [removed: third party] [added: third-party] media revenue.

Our retail media business – Kroger Precision Marketing – provides best in class media capabilities for our consumer packaged goods partners and [removed: is a key driver of our digital profitability and alternative profit.][added: other industry verticals.]

FIFO gross margin is an important measure used by [removed: management] [added: management,] and management believes FIFO gross margin is a useful metric to investors and analysts because it measures the merchandising and operational effectiveness of our go-to-market strategy.

FIFO operating profit is an important measure used by [removed: management] [added: management,] and management believes FIFO operating profit is a useful metric to investors and analysts because it measures the operational effectiveness of our financial model.

By executing on our go-to-market strategy built on the four pillars of Fresh, _Our Brands_, Personalization and Seamless, we are creating a shopping experience that builds loyalty and grows sales.

Our retail business generates traffic and data which accelerates growth in our high operating margin alternative profit businesses, like Kroger Precision Marketing.

In turn, the value generated from these businesses enables us to reinvest back into our retail business.

We are focused on enhancing our pillars and delivering an exceptional customer experience to accelerate this flywheel effect.

By expanding our store network and improving our digital capabilities, we expect to grow households and increase sales.

Kroger has evolved into a more diverse business, with a model that provides more ways than ever to generate net earnings growth.

| | ● | Expanding operating margin through long-term initiatives in gross margin, growing alternative profit businesses, and productivity and cost saving initiatives that are focused on simplifying processes and utilizing technology to enhance the associate experience without affecting the customer experience. Together, these will enable us to improve operating margin, while balancing strategic price investments for customers and wage and benefit investments for associates. |

We achieved strong results in 2023, in line with our long-term growth model and built on three consecutive years of growth, despite navigating a challenging operating environment.

By maintaining our long-term commitment to lower prices, through personalized promotions and rewards, we are increasing customer visits and growing loyal households through the strength of our retail business, continuing our evolution into a more diverse business, and our value creation model is providing us multiple ways to drive sustainable future growth.

Our results provided another proof point of the strength and resilience of our value creation model, which supported another year of strong free cash flow and adjusted net earnings per diluted share growth, excluding the 53rd week in fiscal year 2023 (the “Extra Week”).

This was the result of continued momentum across several margin expansion initiatives, strong Our Brands performance, strong growth in alternative profit businesses, our ability to effectively manage product cost through strong sourcing practices, lower supply chain costs and a lower year-over-year LIFO charge.

During the year, we continued to invest in wages and the associate experience as a way to support the delivery of a full, fresh and friendly customer experience.

In 2023, we increased associate wages resulting in an average hourly rate of nearly $19, and a rate of nearly $25 with comprehensive benefits factored in, which is a 33% increase in rate in the last five years.

| Sales | ​ | $ | 150,039 | ​ | 1.2 | % | $ | 148,258 | ​ |

| Sales without fuel and the Extra Week | ​ | $ | 130,988 | ​ | 1.1 | % | $ | 129,626 | ​ |

| Adjusted net earnings attributable to The Kroger Co. excluding the Extra Week | ​ | $ | 3,335 | ​ | 7.4 | % | $ | 3,104 | ​ |

| Adjusted FIFO operating profit excluding the Extra Week | ​ | $ | 4,799 | ​ | (5.5) | % | $ | 5,079 | ​ |

| (1) | Identical sales without fuel would have grown 2.3% in fiscal 2023 if not for the reduction in pharmacy sales from the previously communicated termination of our agreement with Express Scripts effective December 31, 2022. In fiscal 2023, the terminated agreement had a positive effect on the FIFO gross margin rate, excluding fuel and the Extra Week, and a negative effect on the OG&A rate, excluding fuel, the Extra Week and the 2023 and 2022 Adjusted Items, as defined below. The overall net effect on adjusted FIFO operating profit was slightly positive. |

| | ● | Achieved net earnings attributable to The Kroger Co. per diluted common share of $2.96, which represents a 3.3% decrease compared to 2022. The 2023 results include losses per diluted common share of $1.60 related to our opioid settlement charges. |

| | ● | Net earnings include $179 million, $144 million net of tax, due to the Extra Week. The Extra Week in 2023 contributed $0.20 to our net earnings per diluted common share result for 2023. |

| | ● | Achieved operating profit of $3.1 billion, which represents a 25% decrease compared to 2022. The 2023 results reflect charges of $1.5 billion related to our opioid settlement charges. |

| | ● | Generated cash flows from operations of $6.8 billion, which represents a 51% increase compared to 2022. |

| | ● | Returned $0.8 billion to shareholders through dividend payments. |

| | ● | Our LIFO charge for 2023 was $113 million, compared to $626 million in 2022. The decrease in LIFO charge was due to lower product cost inflation year-over-year. |

| | ● | Alternative profit streams contributed $1.3 billion of operating profit in 2023. |

| | ● | During the second quarter of 2023, we recognized opioid settlement charges of $1.4 billion, $1.1 billion net of tax, related to the nationwide opioid settlement framework to settle substantially all opioid lawsuits and claims against Kroger. We have agreed to make settlement payments related to the nationwide settlement framework of approximately $1.2 billion in equal installments over 11 years, and $177 million in equal installments over six years. During the first quarter of 2023, we recognized opioid settlement charges of $62 million, $49 million net of tax, related to all pending and future opioid litigation claims with the State of West Virginia, which are payable over 10 years. For additional information about our opioid settlement charges in 2023, see Note 12 to the Consolidated Financial Statements. |

| | ● | On September 8, 2023, Kroger and Albertsons announced they have entered a definitive agreement with C&S Wholesale Grocers, LLC for the combined sale of 413 stores, eight distribution centers, two offices and five private label brands for approximately $1.9 billion cash, in connection with the proposed merger, subject to customary adjustments. The financial terms of this divestiture plan are in line with what we expected and allow us to reaffirm the shareholder value creation opportunity the proposed merger creates. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. |

It is a key driver of our digital profitability and alternative profit.

Net earnings for 2023 include $179 million, $144 million net of tax, due to the Extra Week.

| | ● | Charges to operating, general and administrative expenses (“OG&A”) of $316 million, $268 million net of tax, for merger related costs and $1.5 billion, $1.2 billion net of tax, for opioid settlement charges (the “2023 OG&A Adjusted Items”). |

| Adjustment for opioid settlement charges(1)(8) | ​ | ​ | 1,163 | ​ | ​ | 67 | ​ | ​ | — | ​ |

| Extra Week adjustment(1)(10) | ​ | ​ | (144) | ​ | ​ | — | ​ | ​ | — | ​ |

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| Extra Week adjustment(11) | ​ | ​ | (0.20) | ​ | ​ | — | ​ | ​ | — | ​ |

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Net Earnings per Diluted Share excluding the Adjusted Items (continued)

Kroger is unable to provide a full reconciliation of forward-looking GAAP and non-GAAP measures used in this Annual Report on Form 10-K without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty.

This information is dependent upon future events and may be outside of our control and its unavailability could have a significant effect on future financial results.

These assets, when combined with our go-to-market strategy, deliver a compelling value proposition for our customers.

We continue to build long-term customer loyalty through Fresh, _Our Brands_, Personalization and our seamless shopping experience to drive sustainable sales growth in our retail supermarket business, including fuel and health and wellness.

This, in turn, generates the data and traffic that enables our fast growing, high operating margin alternative profit businesses.

We are evolving from a traditional food retailer into a more diverse, food first business that we expect will consistently deliver net earnings growth in the future.

| --- | --- | --- |

| | ● | Expanding operating margin, through a balanced model where strategic price investments for our customers, investments in our associates’ wages and benefits and investments in technology to deliver a better associate and customer experience are offset by (i) our cost savings program, which has delivered $1 billion in cost savings annually for the past five fiscal years, (ii) improving our product mix, as we accelerate momentum with our Fresh and _Our Brands_ initiatives, and (iii) growing our alternative profit businesses. |

During the third quarter of 2022, we paused our share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.

We achieved exceptional results in 2022 as we executed on our _Leading with Fresh and Accelerating with Digital_ strategy, building on record years in 2020 and 2021.

These results were driven by positive identical sales without fuel of 5.6%, disciplined margin management and strong fuel profitability.

Our proven go-to-market strategy enables us to successfully navigate many operating environments, which has allowed us to effectively manage product cost inflation through strong sourcing practices while maintaining competitive prices and helping customers manage their budgets.

Our value proposition, which includes providing great quality, fresh products at affordable prices, data-driven promotions, trusted _Our Brands_ products and our fuel rewards program, is resonating with shoppers and driving total household growth and enhanced customer loyalty.

During the year, we continued to invest in wages and the associate experience and in creating zero hunger, zero waste communities, as we believe these components of our strategy are critical to achieving long term sustainable growth.

In 2022, our average hourly rates increased by more than 6% and we have now invested an incremental $1.9 billion in associate wages since 2018.

Our average hourly rate is now more than $18 and more than $23, when comprehensive benefits are included.

In 2023, we expect to build on this momentum and deliver revenue and adjusted net earnings per diluted share growth on top of the record results achieved over the past three years.

We expect to grow revenue by continuing to invest in our customers through competitive pricing and personalization, fresh products and a better shopping experience.

Building on our significant investments over the past four years, we will also continue to increase associate wages.

We will fund these investments through product mix improvements, cost saving initiatives and growth in our alternative profit businesses.

Looking forward, we believe we are well positioned to successfully operate in an evolving economic environment and continue to deliver attractive and sustainable total shareholder return within our target range of 8% to 11% over time, which does not contemplate the effect of the proposed merger with Albertsons.

| Sales without fuel | ​ | $ | 129,626 | ​ | 5.2 | % | $ | 123,210 | ​ |

​

| | ● | Achieved operating profit of $4.1 billion, which represents a 19% increase compared to 2021. |

| | ● | Returned $1.7 billion to shareholders through share repurchases and dividend payments. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. |

| | ● | We are currently operating in a more volatile inflationary environment and we experienced higher product cost inflation during 2022, compared to 2021. Our LIFO charge for 2022 was $626 million, compared to $197 million in 2021. This increase was attributable to higher product cost inflation primarily in grocery. |

| | ● | Achieved cost savings greater than $1 billion for the fifth consecutive year. |

| | ● | As previously disclosed, on October 13, 2022, we entered into a merger agreement with Albertsons. In connection with the merger agreement, we entered into a commitment letter for a bridge term loan facility and executed a term loan credit agreement. During the third quarter of 2022, we paused our share repurchase program to prioritize deleveraging following the proposed merger with Albertsons. For additional information about the proposed merger with Albertsons, see Note 16 to the Consolidated Financial Statements. |

| | ● | During 2022, we opened four additional Kroger Delivery customer fulfillment centers powered by Ocado’s automated smart platform — one in Dallas, Texas, one in Pleasant Prairie, Wisconsin, one in Romulus, Michigan and one in Aurora, Colorado. |

| | ● | During 2022, we recognized legal settlement costs of $85 million, $67 million net of tax, relating to the settlement of all opioid litigation claims with the State of New Mexico. This amount was excluded from our adjusted FIFO operating profit and adjusted net earnings results to reflect the unique and non-recurring nature of the charge. This settlement is not an admission of wrongdoing or liability by Kroger and we will continue to vigorously defend against other claims and lawsuits relating to opioids. This settlement is based on a set of unique and specific facts relating to New Mexico, and we do not believe that the settlement amount or any other terms of our agreement with New Mexico can or should be extrapolated to any other opioid-related cases pending against us. It is our view that this settlement is not a reliable proxy for the outcome of any other cases or the overall level of our exposure. |

| | ● | During 2022, we recorded a goodwill and fixed asset impairment charge related to Vitacost.com for $164 million. The talent and capabilities gained through the merger with Vitacost in 2014 have been key to advancing Kroger’s digital platform and growing our digital business to more than $10 billion in annual sales. As our digital strategy has evolved, our primary focus looking forward will be to effectively utilize our Pickup and Delivery capabilities and this reprioritization resulted in the impairment charge. Vitacost.com will continue to operate as an online platform providing great value natural, organic, and eco-friendly products for customers. |

| | ● | Charges to OG&A of $989 million, $754 million net of tax, for commitments to certain multi-employer pension funds, $189 million, $141 million net of tax, for the revaluation of Home Chef contingent consideration and $111 million, $81 million net of tax, for transformation costs (the “2020 OG&A Adjusted Items”). |

| Adjustment for transformation costs(10) | ​ | ​ | — | ​ | ​ | 0.14 | ​ | ​ | 0.12 | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ​ | ​ | ​ | | | | | | | | | | | | ​ |

| Total sales | ​ | $ | 148,258 | ​ | 7.5 | % | $ | 137,888 | ​ | 4.1 | % | $ | 132,498 | ​ |

Total sales increased in 2021, compared to 2020, by 4.1%.

Identical sales, excluding fuel, increased in 2021 on top of record sales results in 2020, which was primarily caused by unprecedented demand due to the COVID-19 pandemic during 2020.

| Excluding fuel | ​ | $ | 127,635 | ​ | $ | 120,846 | ​ |

As of [added: February 3, 2024 and] January 28, 2023, we maintained five forward-starting interest rate swap agreements with a maturity date of August 1, 2027 with an aggregate notional amount totaling $5.4 billion.

The variable rate component on the forward-starting interest rate swaps is the Secured Overnight Financing Rate [removed: (SOFR).][added: (“SOFR”).]

[removed: During] [added: In] 2022, we recognized an unrealized loss of $142 million [added: related to these swaps] that is included in [removed: “(Loss) gain] [added: “Gain (loss)] on investments” in our Consolidated Statements of Operations.

The tables below provide information about our underlying debt portfolio as of [removed: January 28, 2023] [added: February 3, 2024] and January [removed: 29, 2022.][added: 28, 2023.]

The amounts shown for each year represent the contractual maturities of long-term debt, excluding finance leases, as of [removed: January 28, 2023] [added: February 3, 2024] and January [removed: 29, 2022.][added: 28, 2023.]

The variable rate debt is based on a reference rate using the forward yield curve as of [removed: January 28, 2023] [added: February 3, 2024] and January [removed: 29, 2022.][added: 28, 2023.]

The Fair Value column includes the fair value of our debt instruments as of [removed: January 28, 2023] [added: February 3, 2024] and January [removed: 29, 2022.][added: 28, 2023.]

We had no outstanding interest rate derivatives classified as fair value hedges as of [removed: January 28, 2023] [added: February 3, 2024] or January [removed: 29, 2022.][added: 28, 2023.]

| Variable rate [added: principal payments] | ​ | $ | (35) | ​ | $ | (22) | ​ | $ | (81) | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | (138) | ​ | $ | (138) | ​ |

| ​ | | [removed: 2022] [added: 2024] | | | [removed: 2023] [added: 2025] | | | [removed: 2024] [added: 2026] | | | [removed: 2025] [added: 2027] | | | [removed: 2026] [added: 2028] | | | Thereafter | | | Total | | | Fair Value | | |

Based on our year-end [removed: 2022] [added: 2023] variable rate debt levels, a 10 percent change in interest rates would be immaterial.

The price and availability of these commodities directly [removed: impacts] [added: affects] our results of operations.

As of January 28, [removed: 2023 and January 29, 2022,] [added: 2023,] we had no commodity derivative contracts outstanding.

We are exposed to market price volatility for our [removed: investment] [added: equity investments] in [removed: Ocado Group plc (“Ocado”),] [added: certain financial instruments, measured using Level 1 inputs,] which [removed: is] [added: are] measured at fair value through net earnings.

Fair value adjustments flow through [removed: “(Loss) gain] [added: “Gain (loss)] on investments” in our Consolidated Statements of Operations.

The change in fair value of [removed: this investment] [added: certain Level 1 investments] resulted in an unrealized [removed: (loss) gain on investments] [added: loss] of [removed: ($586)] [added: $66] million in [removed: 2022, ($821)] [added: 2023, $586] million in [removed: 2021] [added: 2022] and [removed: $1.0 billion] [added: $821 million] in [removed: 2020.][added: 2021.]

As of January 28, 2023, the [added: fair] value of our investment in [removed: Ocado] [added: certain Level 1 financial instrument] was $401 million.

As of [removed: January 28, 2023,] [added: February 3, 2024,] a 10% change in the fair value of [removed: this investment] [added: these investments] would be approximately [removed: $40] [added: $58] million.

For additional details on [removed: this investment,] [added: these investments,] see Note 7 to the Consolidated Financial Statements.

The target plan asset allocations are established based on our [removed: LDI] [added: liability-driven investment (“LDI”)] strategy.

[removed: As of January 28,] 2023, our defined benefit pension plans had total investment assets of $2.5 billion.

As of February 3, 2024, the fair value of the interest rate swaps designated as cash flow hedges was recorded in “Other assets” for $125 million and accumulated other comprehensive income for $95 million, net of tax.

As of February 3, 2024, the fair value of these swaps was recorded in “Other Assets” for $35 million and “Other long-term liabilities” for $3 million.

In 2023, we recognized an unrealized gain of $174 million that is included in “Gain (loss) on investments” in our Consolidated Statements of Operations.

| ​ | ​ | February 3, 2024 | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate principal payments(1) | ​ | $ | (23) | ​ | $ | (19) | ​ | $ | (1,311) | ​ | $ | (616) | ​ | $ | (625) | ​ | $ | (7,521) | ​ | $ | (10,115) | ​ | $ | (9,256) | ​ |

| Average interest rate(1) | ​ | | 2.41 | % | | 3.03 | % | | 3.00 | % | | 3.68 | % | | 4.50 | % | | 4.56 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| Variable rate principal payments | ​ | $ | (9) | ​ | $ | (81) | ​ | $ | — | ​ | $ | — | ​ | $ | (22) | ​ | $ | (33) | ​ | $ | (145) | ​ | $ | (145) | ​ |

| Average interest rate | ​ | | 7.19 | % | | 3.07 | % | | — | ​ | | — | ​ | | 7.94 | % | | 7.19 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| (1) | The fixed rate principal payments exclude debt discounts and deferred financing costs of $73 million, of which $7 million is current and $66 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs. |

| --- | --- |

| Fixed rate principal payments(1) | ​ | $ | (1,127) | ​ | $ | (10) | ​ | $ | (10) | ​ | $ | (1,392) | ​ | $ | (612) | ​ | $ | (8,085) | ​ | $ | (11,236) | ​ | $ | (10,455) | ​ |

| Average interest rate(1) | ​ | | 3.89 | % | | 2.67 | % | | 2.68 | % | | 3.04 | % | | 3.68 | % | | 4.56 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| (1) | The fixed rate principal payments exclude debt discounts and deferred financing costs of $82 million, of which $9 million is current and $73 million is long-term. The weighted average interest rate calculation excludes the effects of debt discounts and deferred financing costs. |

| --- | --- |

We manage our exposure to diesel fuel price changes through the strategic use of diesel fuel hedge contracts.

When we use fuel hedge contracts, it is primarily to manage our exposure to fluctuations in diesel fuel prices for our logistics operations.

We do not enter into fuel hedge arrangements for trading purposes.

As a matter of policy, all of our hedge positions are intended to reduce risk by hedging an underlying economic exposure.

Because of the high correlation between the hedging instrument and the underlying exposure, fluctuations in the value of the instruments generally are offset by reciprocal changes in the value of the underlying exposure.

The diesel fuel hedge contracts we use are straightforward instruments with liquid markets.

As of February 3, 2024, our outstanding diesel fuel hedge contracts had a total notional amount of $48 million.

The fair value and effect to the Consolidated Statement of Operations of these contracts is insignificant.

As of February 3, 2024, we had no commodity derivative contracts outstanding other than the diesel fuel hedge contracts described above.

As of February 3, 2024, the fair value of our investments in certain Level 1 financial instruments was $578 million.

As of February 3, 2024, our defined benefit pension plans had total investment assets of $2.4 billion.

As of January 28.

*​*

We had no forward-starting interest rate swap agreements outstanding as of January 29, 2022.

| Fixed rate | ​ | $ | (1,118) | ​ | $ | (3) | ​ | $ | (3) | ​ | $ | (1,386) | ​ | $ | (607) | ​ | $ | (8,037) | ​ | $ | (11,154) | ​ | $ | (10,455) | ​ |

| Average interest rate | ​ | | 4.52 | % | | 1.53 | % | | 3.64 | % | | 4.26 | % | | 4.68 | % | | 4.54 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | January 29, 2022 | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed rate | ​ | $ | (416) | ​ | $ | (1,107) | ​ | $ | (5) | ​ | $ | (3) | ​ | $ | (1,387) | ​ | $ | (8,688) | ​ | $ | (11,606) | ​ | $ | (13,050) | ​ |

| Average interest rate | ​ | | 4.38 | % | | 4.50 | % | | 1.51 | % | | 3.53 | % | | 4.27 | % | | 4.46 | % | ​ | ​ | ​ | ​ | ​ | ​ |

| Variable rate | ​ | $ | (35) | ​ | $ | (23) | ​ | $ | — | ​ | $ | (81) | ​ | $ | — | ​ | $ | — | ​ | $ | (139) | ​ | $ | (139) | ​ |

| Average interest rate | ​ | | 1.86 | % | | 2.61 | % | | — | ​ | | 0.12 | % | | — | ​ | | — | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

Our Company is built on the foundation of our [removed: food] retail [added: grocery] business, which includes the added convenience of our retail pharmacies and fuel centers.

All references to [removed: 2022, 2021] [added: 2023, 2022] and [removed: 2020] [added: 2021] are to the fiscal years ended [added: February 3, 2024,] January 28, [removed: 2023, January 29, 2022] [added: 2023] and January [removed: 30, 2021,] [added: 29, 2022,] respectively, unless specifically indicated otherwise.

Our combination of assets [removed: include] [added: includes] the following:

As of [removed: January 28, 2023,] [added: February 3, 2024,] Kroger operates supermarkets under a variety of local banner names in 35 states and the District of Columbia.

As of [removed: January 28, 2023,] [added: February 3, 2024,] Kroger operated, either directly or through its subsidiaries, [removed: 2,719] [added: 2,722] supermarkets, of which [removed: 2,252] [added: 2,257] had pharmacies and [removed: 1,637] [added: 1,665] had fuel centers.

Each fuel center typically includes [removed: 5] [added: five] to [removed: 10] [added: ten] islands of fuel dispensers and storage tanks with capacity for 40,000 to 50,000 gallons of fuel.

The combo store is the primary [removed: food] [added: grocery] store format.

We believe this format is successful because the stores are large enough to offer the specialty [removed: departments that customers desire for one-stop shopping,] [added: departments,] including natural food and organic sections, pharmacies, general merchandise, pet centers and high-quality perishables such as fresh seafood and organic produce.

We offer Pickup and Harris Teeter ExpressLane™ — personalized, order online, pick up at the store services — at [removed: 2,274] [added: 2,350] of our supermarkets and provide Delivery, which allows us to offer digital solutions to substantially all of our customers.

Our Delivery solutions include orders delivered to customers from retail store [removed: locations and] [added: locations,] customer fulfillment centers powered by [removed: Ocado.][added: Ocado and orders placed through third-party platforms.]

These channels allow us to serve customers anything, [removed: anytime,] [added: anytime] and anywhere with zero compromise on selection, convenience, and price.

_Our Brands_ products play an important role in our merchandising strategy and represented over [removed: $30] [added: $31] billion of our sales in [removed: 2022.][added: 2023.]

Our supermarkets, on average, stock over [removed: 13,500] [added: 12,600] private label items.

Both Simple [removed: Truth] [added: Truth®] and Simple Truth [removed: Organic] [added: Organic®] are free from a defined list of artificial ingredients that some customers have told us they do not want in their food, and the Simple Truth Organic products are USDA certified organic.

Approximately 30% of _Our Brands_ units and [removed: 42%] [added: 43%] of the grocery category _Our Brands_ units sold in our supermarkets are produced in our food production plants; the remaining _Our Brands_ items are produced to our strict specifications by outside manufacturers.

These plants consisted of 14 dairies, [removed: 9] [added: nine] deli or bakery plants, five grocery product plants, two beverage plants, one meat plant and two cheese plants.

The traffic and data generated by our retail [removed: supermarket] business, including pharmacies and fuel centers, is enabling this transformation.

Kroger serves approximately [removed: 60] [added: 62] million households annually and because of our rewards program, over [removed: 90%] [added: 95%] of customer transactions are tethered to a Kroger loyalty card.

Our 20 years of investment in data science capabilities is allowing us to utilize this data to create personalized experiences and value for our customers and is also enabling our fast-growing, high operating margin alternative profit businesses, including data analytic services and [removed: third party] [added: third-party] media revenue.

Our retail media business – Kroger Precision Marketing – provides differentiated media capabilities for our consumer packaged goods partners and [removed: is a key driver of our digital profitability and alternative profit.][added: other industry verticals.]

As of [removed: January 28, 2023,] [added: February 3, 2024,] Kroger employed nearly [removed: 430,000] [added: 414,000] full- and part-time employees.

We have long been guided by our [removed: core] values – Honesty, Integrity, Respect, Safety, Diversity and Inclusion.

To deliver on our customers’ [removed: experiences,] [added: experiences and remain competitive with union and non-union employers,] we continually [added: try to] improve how we attract and retain talent.

Many [removed: supermarket] [added: retail] roles offer opportunities to learn new skills, grow and advance careers.

Associates at all levels of [removed: the Company] [added: Kroger] have access to training and education programs to build their skills and prepare for the roles they want.

In 2023, we [removed: expect to spend] [added: spent] approximately [removed: $175] [added: $210] million on training our associates through onboarding, leadership development [removed: programs,] [added: programs] and programs designed to upskill associates across the Company.

Approximately [removed: 5,000] [added: 7,000] associates, [removed: 90%] [added: 94%] of whom are hourly, have taken advantage of our tuition reimbursement program in [removed: 2022.][added: 2023.]

Kroger has invested [removed: more than $50] [added: approximately $54] million in this program since it launched in 2018.

We are investing in our associates by expanding our industry-leading benefits, including continuing education, training and [removed: development,] [added: development and] health and wellness.

We strive to reflect the communities we serve and foster a culture that [removed: empowers everyone to be their true self,] inspires [removed: collaboration,] [added: collaboration] and feeds the human spirit.

[removed: The] [added: This ongoing commitment includes the] following [removed: summarizes our framework:] [added: framework pillars:] Create a More Inclusive Culture; Develop Diverse Talent; Advance Diverse Partnerships; Advance Equitable Communities; and Deeply Listen and Report Progress.

Our associates’ safety is a top [removed: priority and it is one of our core values.][added: priority.]

We also track the completion of required training for [removed: associates] [added: associates,] and we regularly share these metrics with leaders and relevant team members to inform management decisions.

There are approximately [removed: 320] [added: 350] such agreements, usually with terms of three to five years.

Our objective is to negotiate contracts that balance [removed: competitive] wage increases [added: that are competitive with union] and [added: non-union employers and provide] affordable healthcare for associates with keeping groceries affordable for the communities we serve.

Managing climate change impacts is an important part of _Thriving Together_, Kroger’s Environmental, Social & Governance (“ESG”) [removed: strategy,] [added: strategy] and has been a focus for our business for many years.

With a large portfolio of supermarkets, distribution warehouses and food production plants, as well as a complex supply chain, we recognize Kroger’s [removed: impact] [added: effect] on our climate.

The Public Responsibilities Committee of the Board of Directors oversees our responsibilities as a corporate citizen and [removed: the Company’s] [added: Kroger’s] practices related to environmental sustainability, including climate effects, along with other environmental and social topics of material importance.

[removed: We conducted] [added: To help identify and manage climate-related risks to] our [removed: first] [added: business, we conducted a] quantitative climate risk assessment to determine the likelihood that different physical climate risks, including drought, extreme heat and extreme precipitation, would affect Kroger’s operations at representative facilities in different geographies and, in turn, potentially increase operating costs for these facilities.

We plan to continue these [removed: qualitative and quantitative] [added: climate] risk assessments moving forward.

As of February 3, 2024, we owned 33 food production plants.

We are evolving into a more diverse business.

It is a key driver of our digital profitability and alternative profit.

During 2023, we increased associate wages resulting in an average hourly rate of nearly $19, and a rate of nearly $25 with comprehensive benefits factored in, which is a 33% increase in rate in the last five years.

Over the last five years, we have now invested more than $2.4 billion in incremental wage investments.

We remain committed to supporting our associates with investments in wages and comprehensive benefits that are sustainable and will allow us to continue to keep products affordable for the communities we serve.

We expect to make continued associate investments in 2024.

*​*

It is also one of our core values.

In 2023, we completed our first full Scope 3 emissions baseline.

| Brian W. Nichols | ​ | 51 | ​ | Mr. Nichols was elected Vice President, Corporate Controller in March 2024 and is responsible for oversight of Kroger’s Corporate Accounting and Corporate Tax departments, as well as the Company’s Accounting Centers and Accounting Modernization, Pension Investment, and Insurance and Claims teams. Prior to that, he served as Vice President, Assistant Corporate Controller from April 2021 to March 2024. From May 2018 to April 2021, Mr. Nichols served as Senior Director and Assistant Corporate Controller. Prior to that, he held several leadership roles, including Senior Manager of Corporate and External Financial Reporting and Senior Financial Analyst of SEC Reporting. Mr. Nichols joined Kroger in 2000 as Assistant Controller of the Central Division. |

As of January 28, 2023, we operated 33 food production plants.

During 2022, we raised our average hourly rates by more than 6% and have now invested an incremental $1.9 billion in associate wages since 2018.

Our average hourly rate is now more than $18 and more than $23, when comprehensive benefits are included.

We are committed to sustainably increasing associate wages and plan to invest more than $770 million in associates in 2023.

To help identify and manage climate-related risks to our business, we conduct both qualitative and quantitative risk assessments.

This includes resetting our current Scope 1 and 2 emissions goal to support the 1.5°C scenario, and setting new Scope 3 emissions goals.

| Gary Millerchip | ​ | 51 | ​ | Mr. Millerchip was elected Senior Vice President and Chief Financial Officer effective April 2019. From July 2010 to April 2019, he served as Chief Executive Officer of Kroger Personal Finance. Before coming to Kroger, Mr. Millerchip was responsible for the Royal Bank of Scotland (RBS) Personal Credit Card business in the United Kingdom. He joined RBS in 1987 and held leadership positions in Sales & Marketing, Finance, Change Management, Retail Banking Distribution Strategy and Branch Operations during his time there. |

For the fiscal year ended [removed: January 28, 2023.][added: February 3, 2024.]

| Yes ☐ | ​ | No [removed: ☐] [added: ☒] |

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter (August [removed: 13, 2022).][added: 12, 2023).]

[removed: 717,467,532,] [added: 721,687,844,] shares of Common Stock of $1 par value, as of March [removed: 22, 2023.][added: 27, 2024.]

Portions of Kroger’s definitive proxy statement for its [removed: 2023] [added: 2024] annual meeting of shareholders, which shall be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates, are incorporated by reference into Part III of this Report.

For the Fiscal Year Ended [removed: January 28, 2023][added: February 3, 2024]

| [Item 2](#ITEM2PROPERTIES_938453) | [Properties](#ITEM2PROPERTIES_938453) | [removed: 19] [added: 21] |

| [Item 3](#ITEM3LEGALPROCEEDINGS_398656) | [Legal Proceedings](#ITEM3LEGALPROCEEDINGS_398656) | [removed: 20] [added: 22] |

| [Item 4](#ITEM4MINESAFETY_848917) | [Mine Safety Disclosures](#ITEM4MINESAFETY_848917) | [removed: 20] [added: 22] |

| [Part II](#PARTII_655666) | ​ | [removed: 20] [added: 22] |

| [Item 5](#ITEM5MARKETFORREGISTRANTS_787451) | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#ITEM5MARKETFORREGISTRANTS_787451) | [removed: 20] [added: 22] |

| [Item 6](#ITEM6SELECTEDFINANCIALDATA_648582) | [Reserved](#ITEM6SELECTEDFINANCIALDATA_648582) | [removed: 22] [added: 24] |

| [Item 7](#ITEM7MANAGEMENTSDISCUSSION_279865) | [Management’s Discussion and Analysis of Financial Condition and Results of Operations](#ITEM7MANAGEMENTSDISCUSSION_279865) | [removed: 23] [added: 25] |

| [Item 7A](#ITEM7AQUANTITATIVEANDQUALITATIVE_789704) | [Quantitative and Qualitative Disclosures About Market Risk](#ITEM7AQUANTITATIVEANDQUALITATIVE_789704) | [removed: 45] [added: 48] |

| [Item 8](#ITEM8FINANCIALSTATEMENTS_150262) | [Financial Statements and Supplementary Data](#ITEM8FINANCIALSTATEMENTS_150262) | [removed: 48] [added: 51] |

| [Item 9](#ITEM9CHANGESINANDDISAGREEMENTS_94374) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#ITEM9CHANGESINANDDISAGREEMENTS_94374) | [removed: 94] [added: 99] |

| [Item 9A](#ITEM9ACONTROLSANDPROCEDURES_212235) | [Evaluation of Disclosure Controls and Procedures](#ITEM9ACONTROLSANDPROCEDURES_212235) | [removed: 94] [added: 99] |

| [Item 9B](#ITEM9BOTHERINFORMATION_351052) | [Other Information](#ITEM9BOTHERINFORMATION_351052) | [removed: 94] [added: 99] |

| [Item 9C](#ITEM_9C_DISCLOSURE_REGARDING_FOREIGN) | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ITEM_9C_DISCLOSURE_REGARDING_FOREIGN) | [removed: 94] [added: 99] |

| [Part III](#PARTIII_970612) | ​ | [removed: 95] [added: 100] |

| [Item 10](#ITEM10DIRECTORSEXECUTIVEOFFICERS_174492) | [Directors, Executive Officers and Corporate Governance](#ITEM10DIRECTORSEXECUTIVEOFFICERS_174492) | [removed: 95] [added: 100] |

| [Item 11](#ITEM11EXECUTIVECOMPENSATION_619783) | [Executive Compensation](#ITEM11EXECUTIVECOMPENSATION_619783) | [removed: 95] [added: 100] |

| [Item 12](#ITEM12SECURITYOWNERSHIP_54845) | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#ITEM12SECURITYOWNERSHIP_54845) | [removed: 95] [added: 100] |

| [Item 13](#ITEM13CERTAINRELATIONSHIPS_678646) | [Certain Relationships and Related Transactions, and Director Independence](#ITEM13CERTAINRELATIONSHIPS_678646) | [removed: 96] [added: 101] |

| [Item 14](#ITEM14PRINCIPALACCOUNTINGFEES_666861) | [Principal Accounting Fees and Services](#ITEM14PRINCIPALACCOUNTINGFEES_666861) | [removed: 96] [added: 101] |

| [Part IV](#PARTIV_153847) | ​ | [removed: 97] [added: 102] |

| [Item 15](#ITEM15EXHIBITSFINANCIALSTATEMENT_412498) | [Exhibits, Financial Statement Schedules](#ITEM15EXHIBITSFINANCIALSTATEMENT_412498) | [removed: 97] [added: 102] |

| [Item 16](#ITEM16FORM10KSUMMARY_429814) | [Form 10-K Summary](#ITEM16FORM10KSUMMARY_429814) | [removed: 99] [added: 104] |

| ​ | [Signatures](#SIGNATURES_425578) | [removed: 100] [added: 105] |

Such statements are indicated by words such as “achieve,” “affect,” “anticipate,” [added: “assumptions,”] “believe,” “committed,” “continue,” “could,” “deliver,” “effect,” “enable,” “estimate,” “expects,” “future,” “goal,” “growth,” “intended,” “likely,” “may,” “model,” “objective,” “plan,” “position,” “program,” “range,” “result,” “strategy,” “strive,” “strong,” “target,” “trend,” “will” and “would,” and similar words or phrases.

| | ● | The extent to which our sources of liquidity are sufficient to meet our requirements may be affected by the state of the financial markets and the effect that such condition has on our ability to issue commercial paper at acceptable rates. Our ability to borrow under our committed lines of credit, including our bank credit facilities, could be impaired if one or more of our lenders under those lines is unwilling or unable to honor its contractual obligation to lend to us, or in the event that global pandemics, [removed: including the ongoing COVID-19 pandemic (including any variant),] natural disasters or weather conditions interfere with the ability of our lenders to lend to us. Our ability to refinance maturing debt may be affected by the state of the financial markets. |

| | ● | Our ability to achieve sales, earnings and incremental FIFO operating profit goals may be affected by: the risks relating to or arising from our proposed [added: nationwide opioid litigation settlement, including our ability to finalize and effectuate the settlement, the scope and coverage of the ultimate settlement and the expected financial or other effects that could result from the settlement; our proposed] transaction with [removed: Albertsons Companies, Inc. (“Albertsons”) announced in October 2022,] [added: Albertsons,] including, among [removed: others,] [added: other things,] our ability to consummate the proposed [removed: transaction,] [added: transaction and related divestiture plan,] including on the terms of the merger [removed: agreement,] [added: agreement and divestiture plan,] on the anticipated timeline, [removed: and/or] with the required regulatory [removed: approvals; COVID-19 pandemic related factors, risks and challenges;] [added: approvals, and/or resolution of pending litigation challenging the merger;] labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in [removed: the labor market;] [added: labor;] changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with us; pricing and promotional activities of existing and new competitors, [removed: including non-traditional competitors,] and the aggressiveness of that competition; our response to these actions; the state of the economy, including interest rates, the current inflationary environment and future potential [removed: inflationary] [added: inflationary, disinflationary] and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical environment including [removed: the war in Ukraine;] [added: wars and conflicts;] unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; supply constraints; diesel fuel costs related to our logistics operations; trends in consumer spending; the extent to which our customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which we [removed: operate;] [added: operates;] our ability to retain pharmacy sales from [removed: third] [added: third-] party payors; consolidation in the healthcare industry, including pharmacy benefit managers; our ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of our future growth plans; the ability to execute our [removed: go-to-market] [added: growth] strategy and value creation model, including continued cost savings, growth of our alternative profit businesses, and our ability to better serve our customers and to generate customer loyalty and sustainable growth through our strategic pillars of fresh, _Our Brands_, personalization, and seamless; and the successful integration of merged companies and new partnerships. |

| | ● | Our [added: adjusted] effective tax rate may differ from the expected rate due to changes in tax laws, the status of pending items with various taxing authorities, and the deductibility of certain expenses. |

| Yes ☐ | ​ | No ☒ |

$35.3 billion.

| [Item 1C](#ITEM1C_608165) | [Cybersecurity](#ITEM1C_608165) | 20 |

$33.6 billion.

| --- | --- |

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 program (“TPCRM”), 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 Information Officer (“CIO”).

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 NIST and RMF.

_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 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.

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.

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.

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 CIO 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 CIO reports to the CEO and leads technology and digital capabilities for the Kroger Co., including the overall cybersecurity strategy.

Kroger’s CIO & Chief Digital Officer, has over 20 years of both leading and transforming technology, digital growth, and e-commerce in the retail and food industry.

As of [removed: January 28, 2023,] [added: February 3, 2024,] we operated approximately 2,800 owned or leased supermarkets, distribution warehouses and food production plants through divisions, subsidiaries or affiliates.

The total cost of our owned assets and finance leases at [removed: January 28, 2023,] [added: February 3, 2024,] was [removed: $53.4] [added: $56.7] billion while the accumulated depreciation was [removed: $28.6] [added: $31.5] billion.

Our common stock is listed on the New York Stock Exchange under the symbol “KR.” As of March [removed: 22, 2023,] [added: 27, 2024,] there were [removed: 25,062] [added: 24,275] shareholders of record.

During [removed: 2021,] [added: 2023,] we paid two quarterly cash dividends of [removed: $0.18] [added: $0.26] per share and two quarterly cash dividends of [removed: $0.21] [added: $0.29] per share.

On March 1, [removed: 2023,] [added: 2024,] we paid a quarterly cash dividend of [removed: $0.26] [added: $0.29] per share.

On March [removed: 9, 2023,] [added: 14, 2024,] we announced that our Board of Directors declared a quarterly cash dividend of [removed: $0.26] [added: $0.29] per share, payable on June 1, [removed: 2023,] [added: 2024,] to shareholders of record at the close of business on May 15, [removed: 2023.][added: 2024.]

[removed: ][added: ]

| Company Name/Index | | [removed: 2017 | |] 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | [added: 2023 | |]

* Total assumes $100 invested on February [removed: 3, 2018,] [added: 2, 2019,] in The Kroger Co., S&P 500 Index, and the Peer Group, with reinvestment of dividends.

The Peer Group consists of Albertsons Companies, Inc. (included from June 26, 2020 when it began trading), Costco Wholesale Corporation, CVS Health Corporation, Koninklijke Ahold Delhaize N.V., [removed: Supervalu Inc. (included through October 19, 2018 when it was acquired by United Natural Foods),] Target Corp., Walgreens Boots Alliance Inc. and Walmart Inc.

The following table presents information on our purchases of our common shares during the fourth quarter of [removed: 2022:][added: 2023:]

| First [added: period -] four weeks | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Second [added: period -] four weeks | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Third [removed: four] [added: period - five] weeks | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| (2) | Includes (i) shares repurchased under a program announced on December 6, 1999 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”) and (ii) [removed: 21,124] [added: 18,052] shares that were surrendered to [removed: the Company] [added: Kroger] by participants under our long-term incentive plans to pay for taxes on restricted stock awards. |

| The Kroger Co. | | 100 | | 97.94 | | 128.49 | | 165.19 | | 174.57 | | 183.07 | ​ |

| S&P 500 Index | | 100 | | 121.56 | | 142.53 | | 172.46 | | 161.03 | | 199.42 | ​ |

| Peer Group | | 100 | | 120.67 | | 148.43 | | 175.27 | | 169.86 | | 197.90 | ​ |

| November 5, 2023 to December 2, 2023 | | 7,093 | ​ | $ | 44.09 | | 6,900 | ​ | $ | 1,000 | ​ |

| December 3, 2023 to December 30, 2023 | | 82,059 | ​ | $ | 44.75 | | 64,200 | ​ | $ | 1,000 | ​ |

| December 31, 2023 to February 3, 2024 | | 96,000 | ​ | $ | 46.07 | | 96,000 | ​ | $ | 1,000 | ​ |

| Total | | 185,152 | ​ | $ | 45.41 | | 167,100 | ​ | $ | 1,000 | ​ |

| (1) | The fourth quarter of 2023 contained two 28-day periods and one 35-day period. |

| The Kroger Co. | | 100 | | 97.48 | | 95.47 | | 125.25 | | 161.03 | | 170.17 | ​ |

| S&P 500 Index | | 100 | | 99.94 | | 121.49 | | 142.45 | | 172.36 | | 160.94 | ​ |

| Peer Group | | 100 | | 97.12 | | 117.20 | | 144.16 | | 170.23 | | 164.97 | ​ |

| November 6, 2022 to December 3, 2022 | | 26,566 | ​ | $ | 47.90 | | 26,566 | ​ | $ | 1,000 | ​ |

| December 4, 2022 to December 31, 2022 | | 87,928 | ​ | $ | 45.83 | | 66,804 | ​ | $ | 1,000 | ​ |

| January 1, 2023 to January 28, 2023 | | 83,500 | ​ | $ | 45.15 | | 83,500 | ​ | $ | 1,000 | ​ |

| Total | | 197,994 | ​ | $ | 45.82 | | 176,870 | ​ | $ | 1,000 | ​ |

| (1) | The reported periods conform to our fiscal calendar composed of thirteen 28-day periods. The fourth quarter of 2022 contained three 28-day periods. |

For the Fiscal Year Ended [removed: January 28, 2023][added: February 3, 2024]

| [Report of Independent Registered Public Accounting [removed: Firm](#Report_of_independent)] [added: Firm](#ReportofIndependent_793021)] | [removed: 49] [added: 52] |

| [Consolidated Balance Sheets](#BALANCE_SHEETS) | [removed: 52] [added: 55] |

| [Consolidated Statements of Operations](#STATEMENTS_OF_OPERATIONS) | [removed: 53] [added: 56] |

| [Consolidated Statements of Comprehensive Income](#STATEMENTS_COMPREHENSIVE_INCOME) | [removed: 54] [added: 57] |

| [Consolidated Statements of Cash Flows](#STATEMENTS_CASH_FLOWS) | [removed: 55] [added: 58] |

| [Consolidated Statements of Changes in Shareholders’ Equity](#CONSOLIDATEDSTATEMENTOFCHANGESINSHA) | [removed: 56] [added: 59] |

| [Notes to Consolidated Financial Statements](#NOTES_TO_FINANCIAL_STATEMEN) | [removed: 57] [added: 60] |

We have audited the accompanying consolidated balance sheets of The Kroger Co. and its subsidiaries (the “Company”) as of [removed: January 28, 2023] [added: February 3, 2024] and January [removed: 29, 2022,] [added: 28, 2023,] and the related consolidated statements of operations, of comprehensive income, of [removed: changes in] shareholders' equity and of cash flows for each of the three years in the period ended [removed: January 28, 2023,] [added: February 3, 2024,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of [removed: January 28, 2023,] [added: February 3, 2024,] based on criteria established in _Internal Control - Integrated Framework_ (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of [removed: January 28, 2023] [added: February 3, 2024] and January [removed: 29, 2022,] [added: 28, 2023,] and the results of its operations and its cash flows for each of the three years in the period ended [removed: January 28, 2023] [added: February 3, 2024] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: January 28, 2023,] [added: February 3, 2024,] based on criteria established in _Internal Control - Integrated Framework_ (2013) issued by the COSO.

As described in Notes 1 and 2 to the consolidated financial statements, the Company’s consolidated goodwill balance was $2.9 billion as of [removed: January 28, 2023] [added: February 3, 2024] and the goodwill associated with the KSP reporting unit was $243 million.

| ​ | | [removed: January 28,] [added: February 3,] | | | January [removed: 29,] [added: 28,] | | |

| (In millions, except par amounts) | ​ | [removed: 2023] [added: 2024] | | ​ | [removed: 2022] [added: 2023] | | |

| Cash and temporary cash investments | ​ | $ | [removed: 1,015] [added: 1,883] | ​ | $ | [removed: 1,821] [added: 1,015] | ​ |

| Store deposits in-transit | ​ | | [removed: 1,127] [added: 1,215] | ​ | | [removed: 1,082] [added: 1,127] | ​ |

| Receivables | ​ | | [removed: 2,234] [added: 2,136] | ​ | | [removed: 1,828] [added: 2,234] | ​ |

| FIFO inventory | ​ | | [removed: 9,756] [added: 9,414] | ​ | | [removed: 8,353] [added: 9,756] | ​ |

| LIFO reserve | ​ | | [removed: (2,196)] [added: (2,309)] | ​ | | [removed: (1,570)] [added: (2,196)] | ​ |

| Prepaid and other current assets | ​ | ​ | [removed: 734] [added: 609] | ​ | ​ | [removed: 660] [added: 734] | ​ |

| Total current assets | ​ | | [removed: 12,670] [added: 12,948] | ​ | | [removed: 12,174] [added: 12,670] | ​ |

| Property, plant and equipment, net | ​ | | [removed: 24,726] [added: 25,230] | ​ | | [removed: 23,789] [added: 24,726] | ​ |

| Operating lease assets | ​ | ​ | [removed: 6,662] [added: 6,692] | ​ | ​ | [removed: 6,695] [added: 6,662] | ​ |

| Intangibles, net | ​ | | 899 | ​ | | [removed: 942] [added: 899] | ​ |

| Goodwill | ​ | | 2,916 | ​ | | [removed: 3,076] [added: 2,916] | ​ |

| Other assets | ​ | | [removed: 1,750] [added: 1,820] | ​ | | [removed: 2,410] [added: 1,750] | ​ |

| Total Assets | ​ | $ | [removed: 49,623] [added: 50,505] | ​ | $ | [removed: 49,086] [added: 49,623] | ​ |

| Current portion of long-term debt including obligations under finance leases | ​ | $ | [removed: 1,310] [added: 198] | ​ | $ | [removed: 555] [added: 1,310] | ​ |

| Current portion of operating lease liabilities | ​ | ​ | [removed: 662] [added: 670] | ​ | ​ | [removed: 650] [added: 662] | ​ |

| Accrued salaries and wages | ​ | | [removed: 1,746] [added: 1,323] | ​ | | [removed: 1,736] [added: 1,746] | ​ |

| Other current liabilities | ​ | | [removed: 6,401] [added: 3,486] | ​ | | [removed: 6,265] [added: 3,341] | ​ |

| Total current liabilities | ​ | | [removed: 17,238] [added: 16,058] | ​ | | [removed: 16,323] [added: 17,238] | ​ |

| Long-term debt including obligations under finance leases | ​ | ​ | [removed: 12,068] [added: 12,028] | ​ | ​ | [removed: 12,809] [added: 12,068] | ​ |

| Noncurrent operating lease liabilities | ​ | ​ | [removed: 6,372] [added: 6,351] | ​ | ​ | [removed: 6,426] [added: 6,372] | ​ |

| Deferred income taxes | ​ | | [removed: 1,672] [added: 1,579] | ​ | | [removed: 1,562] [added: 1,672] | ​ |

| Pension and postretirement benefit obligations | ​ | | [removed: 436] [added: 385] | ​ | | [removed: 478] [added: 436] | ​ |

| Other long-term liabilities | ​ | | [removed: 1,823] [added: 2,503] | ​ | | [removed: 2,059] [added: 1,823] | ​ |

| Total Liabilities | ​ | | [removed: 39,609] [added: 38,904] | ​ | | [removed: 39,657] [added: 39,609] | ​ |

| Common shares, $1 par per share, 2,000 shares authorized; 1,918 shares issued in [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] | ​ | | 1,918 | ​ | | 1,918 | ​ |

April 2, 2024

| Accounts payable | ​ | | 10,381 | ​ | | 10,179 | ​ |

Years Ended February 3, 2024, January 28, 2023 and January 29, 2022

Years Ended February 3, 2024, January 28, 2023 and January 29, 2022

| Accounts payable | ​ | | 545 | ​ | | 44 | ​ | | 903 | ​ |

| Accrued expenses | ​ | | (222) | ​ | | (167) | ​ | | (134) | ​ |

Years Ended February 3, 2024, January 28, 2023 and January 29, 2022

| Balances at February 3, 2024 | | 1,918 | ​ | $ | 1,918 | ​ | $ | 3,922 | | 1,198 | ​ | $ | (20,682) | ​ | $ | (489) | ​ | $ | 26,946 | ​ | $ | (14) | ​ | $ | 11,601 |

_Reclassifications_

The Company reclassified $3.1 billion of liabilities from other current liabilities to accounts payable on the Consolidated Balance Sheet for the year ended January 28, 2023 to conform to the current year presentation.

This reclassification was made to better align the presentation of liabilities associated with our third-party financing arrangements and other current liabilities on the Consolidated Balance Sheet with management’s internal reporting.

A similar reclassification was made to the Consolidated Statement of Cash Flows resulting in a change to accounts payable and accrued expenses within net cash provided by operating activities for the years ended February 3, 2024, January 28, 2023, and January 29, 2022.

The reclassification did not affect total current liabilities on the Company’s Consolidated Balance Sheet or total operating cash flows on the Consolidated Statement of Cash Flows.

The Company made the final contingent consideration payment in the second quarter of 2023, which was based on the fair value of the outstanding year-end 2022 liability.

| | (1) | The increase in 2023, compared to 2022 and 2021, was the result of higher claim costs. |

The evaluation did not result in impairment in 2023 or 2021.

The evaluation resulted in an impairment in 2022.

| 2028 | ​ | | 8 |

| Current | ​ | | 114 | ​ | | 91 | ​ | | 67 | ​ |

| Non-deductible legal settlements | ​ | 1.4 | ​ | — | ​ | — | ​ |

| Effective income tax rate | | 23.5 | % | 22.5 | % | 18.8 | % |

| Legal settlements | ​ | ​ | 313 | ​ | ​ | — | ​ |

At February 3, 2024, the Company had state credit carryforwards of $7 which expire from 2024 through 2037.

As of February 3, 2024, the years ended February 1, 2020 and forward remain open for review for federal income tax purposes.

| ​ | | 2024 | | | 2023 | |

| 2026 | ​ | | 1,305 | ​ |

| 2027 | ​ | | 611 | ​ |

| 2028 | ​ | | 642 | ​ |

| Thereafter | ​ | | 7,512 | ​ |

As of February 3, 2024, the fair value of the interest rate swaps designated as cash flow hedges was recorded in “Other Assets” for $125 and accumulated other comprehensive income for $95, net of tax.

As of February 3, 2024, the fair value of these swaps was recorded in “Other Assets” for $35 and “Other long-term liabilities” for $3.

In 2023, the Company recognized an unrealized gain of $174 related to these swaps that is included in “Gain (loss) on investments” in the Company’s Consolidated Statements of Operations.

| February 3, 2024 | ​ | Recognized | | ​ | in the Balance Sheet | | ​ | Balance Sheet | | ​ | Instruments | | ​ | Cash Collateral | | ​ | Net Amount | | |

| Cash Flow Forward-Starting Interest Rate Swaps | ​ | $ | 160 | ​ | $ | — | ​ | $ | 160 | ​ | $ | — | ​ | $ | — | ​ | $ | 160 | ​ |

| Cash Flow Forward-Starting Interest Rate Swaps | ​ | $ | 3 | ​ | $ | — | ​ | $ | 3 | ​ | $ | — | ​ | $ | — | ​ | $ | 3 | ​ |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross Amounts Not Offset in the | | | | | ​ | ​ | ​ | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Net Amount | | ​ | Balance Sheet | | | | | ​ | ​ | ​ | |

| ​ | | Gross Amount | | | Gross Amounts Offset | | | Presented in the | | | Financial | | | ​ | ​ | | ​ | ​ | |

| Liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| Forward-Starting Interest Rate Swaps and Commodity Contracts | ​ | | — | ​ | | 155 | ​ | | 155 | ​ |

March 28, 2023

| Trade accounts payable | ​ | | 7,119 | ​ | | 7,117 | ​ |

| Trade accounts payable | ​ | | 3 | ​ | | 438 | ​ | | 330 | ​ |

| Accrued expenses | ​ | | (126) | ​ | | 331 | ​ | | 1,382 | ​ |

| Net payments on commercial paper | ​ | | — | ​ | ​ | — | ​ | ​ | (1,150) | ​ |

| Balances at February 1, 2020 | | 1,918 | ​ | $ | 1,918 | ​ | $ | 3,337 | | 1,130 | ​ | $ | (16,991) | ​ | $ | (640) | ​ | $ | 20,978 | ​ | $ | (29) | ​ | $ | 8,573 |

| Treasury stock purchases, at cost | | — | ​ | | — | ​ | | — | | 36 | ​ | | (1,196) | ​ | | — | ​ | | — | ​ | | — | ​ | | (1,196) |

During 2020, the Company had a LIFO liquidation primarily related to pharmacy inventory.

The liquidated inventory was carried at lower costs prevailing in prior years as compared with current costs.

The effect of this reduction in inventory decreased “Merchandise costs” by approximately $76, $58 net of tax.

As of January 29, 2022, the Company had $59 and $236 in “Other current liabilities” and “Trade accounts payable,” respectively, associated with financing arrangements.

Costs to transfer inventory and equipment from closed stores are expensed as incurred.

| ​ | ​ | ​ | ​ |

| --- | --- | --- | --- |

| Current | ​ | | 91 | ​ | | 67 | ​ | | 133 | ​ |

| ​ | | 22.5 | % | 18.8 | % | 23.2 | % |

The Company’s effective income tax rates were 22.5% in 2022, 18.8% in 2021, and 23.2% in 2020.

At January 28, 2023, the Company had state credit carryforwards of $34.

These state credit carryforwards expire from 2023 through 2036.

| 2023 | | $ | 1,153 | |

| 2026 | ​ | | 1,386 | ​ |

| 2027 | ​ | | 607 | ​ |

| Thereafter | ​ | | 8,037 | ​ |

The Company did not have any outstanding forward-starting interest rate swap agreements as of January 29, 2022.

The equity investment in Ocado Group plc is measured at fair value through net earnings.

| Balance at January 30, 2021 | ​ | $ | (54) | ​ | $ | (576) | ​ | $ | (630) |

| 2023 | ​ | $ | 930 | ​ | $ | 228 | ​ | $ | 1,158 |

| 2024 | ​ | | 864 | ​ | | 226 | ​ | | 1,090 |

| 2025 | ​ | | 791 | ​ | | 222 | ​ | | 1,013 |

| 2026 | ​ | | 740 | ​ | | 221 | ​ | | 961 |

| 2027 | ​ | | 683 | ​ | | 223 | ​ | | 906 |

| Thereafter | ​ | | 5,688 | ​ | | 1,492 | ​ | | 7,180 |

| Total lease payments | ​ | ​ | 9,696 | ​ | ​ | 2,612 | ​ | $ | 12,308 |

In 2022, the Company opened four additional Kroger Delivery customer fulfillment centers in Romulus, Michigan, Dallas, Texas, Pleasant Prairie, Wisconsin, and Aurora, Colorado.

| Outstanding, year-end 2019 | | 32.2 | ​ | $ | 24.52 | ​ |

| Granted | | 2.9 | ​ | $ | 29.31 | ​ |

| Exercised | | (7.3) | ​ | $ | 17.72 | ​ |

| Canceled or Forfeited | | (1.0) | ​ | $ | 30.53 | ​ |

| Options Outstanding | | 16.6 | | 5.08 | ​ | $ | 30.81 | ​ | $ | 250 | ​ |

| Options Exercisable | | 12.3 | | 4.07 | ​ | $ | 28.29 | ​ | $ | 205 | ​ |

As of [removed: January 28, 2023,] [added: February 3, 2024,] our Chief Executive Officer and [added: Interim] Chief Financial Officer, together with a disclosure review committee appointed by the Chief Executive Officer, evaluated the Company’s disclosure controls and procedures.

Based on that evaluation, our Chief Executive Officer and [added: Interim] Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of [removed: January 28, 2023.][added: February 3, 2024.]

[removed: As of January 28, 2023, there] [added: There] have been no material additional implementations of modules [removed: since] [added: during] the [removed: third] quarter [removed: of 2022.][added: ended February 3, 2024.]

There were no changes in Kroger’s internal control over financial reporting that materially affected, or were reasonably likely to materially affect, Kroger’s internal control over financial reporting during the quarter ended [removed: January 28, 2023.][added: February 3, 2024.]

With the participation of the Chief Executive Officer and the [added: Interim] Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in _Internal Control — Integrated Framework (2013)_, issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on the evaluation, management has concluded that the Company’s internal control over financial reporting was effective as of [removed: January 28, 2023.][added: February 3, 2024.]

The effectiveness of the Company’s internal control over financial reporting as of [removed: January 28, 2023,] [added: February 3, 2024,] has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report, which can be found in Item 8 of this Form 10-K.

Implementation of new accounting ERP modules for general ledger, accounts receivable, accounts payable, fixed assets and a new indirect procurement module were implemented at the beginning of the first quarter of 2021.

In the third quarter of 2022, a new payroll module was implemented.

Additional phases of the project will continue to be implemented over the next several years.

In the fourth quarter of 2023, no director or officer (as defined in Exchange Act Rule 16a-1(f)) of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement for the purchase or sale of securities of the Company, within the meaning of Item 408 of Regulation S-K.

None.

The information required by this Item 10 with respect to executive officers is included within Item 1 in Part I of this Annual Report on Form 10-K under the caption “Information about our Executive Officers.” The information required by this Item not otherwise set forth in Part I above or in this Item 10 of Part III is set forth under the headings Election of Directors, Information Concerning the Board of Directors- Committees of the Board, Information Concerning the Board of Directors- Audit Committee and Delinquent 16(a) Reports, if required, in the definitive proxy statement to be filed by the Company with the Securities and Exchange Commission within 120 days after the end of the fiscal year [removed: 2022] [added: 2023] (the [removed: “2023] [added: “2024] proxy statement”) and is hereby incorporated by reference into this Form 10-K.

The information required by this Item is set forth in the sections entitled Compensation Discussion and Analysis, Compensation Committee Report, and Compensation Tables in the [removed: 2023] [added: 2024] proxy statement and is hereby incorporated by reference into this Form 10-K.

| (1) | The total number of securities reported includes the maximum number of common shares, [removed: 3,383,338,] [added: 2,847,266,] that may be issued under performance units granted under our long-term incentive plans. The nature of the awards is more particularly described in the Compensation Discussion and Analysis section of the definitive [removed: 2023] [added: 2024] proxy statement and is hereby incorporated by reference into this Form 10-K. The weighted-average exercise price in column (b) does not take these performance unit awards into account. [removed: Based on historical data, or in the case of the awards made in 2020 through 2022 and earned in 2022 the actual payout percentage, our best estimate of the number of common shares that will be issued under the performance unit grants is approximately 3,872,462.] |

The remainder of the information required by this Item is set forth in the section entitled Beneficial Ownership of Common Stock in the [removed: 2023] [added: 2024] proxy statement and is hereby incorporated by reference into this Form 10-K.

| Equity compensation plans approved by security holders | | 18,264,812 | ​ | $ | 33.11 | | 39,807,196 | ​ |

| Total | | 18,264,812 | ​ | $ | 33.11 | | 39,807,196 | ​ |

| Equity compensation plans approved by security holders | | 20,021,688 | ​ | $ | 30.81 | | 53,470,441 | ​ |

| Total | | 20,021,688 | ​ | $ | 30.81 | | 53,470,441 | ​ |

The information required by this Item is set forth in the sections entitled Related Person Transactions and Information Concerning the Board of Directors-Independence in the [removed: 2023] [added: 2024] proxy statement and is hereby incorporated by reference into this Form 10-K.

The information required by this Item is set forth in the section entitled Ratification of the Appointment of Kroger’s Independent Auditor in the [removed: 2023] [added: 2024] proxy statement and is hereby incorporated by reference into this Form 10-K.

| ​ | ​ | Consolidated Balance Sheets as of [added: February 3, 2024 and] January 28, 2023 [removed: and January 29, 2022] |

| ​ | ​ | Consolidated Statements of Operations for the years ended [added: February 3, 2024,] January 28, [removed: 2023,] [added: 2023 and] January 29, 2022 [removed: and January 30, 2021] |

| ​ | ​ | Consolidated Statements of Comprehensive Income for the years ended [added: February 3, 2024,] January 28, [removed: 2023,] [added: 2023 and] January 29, 2022 [removed: and January 30, 2021] Consolidated Statements of Cash Flows for the years ended [added: February 3, 2024,] January 28, [removed: 2023,] [added: 2023 and] January 29, 2022 [removed: and January 30, 2021] |

| ​ | ​ | Consolidated Statement of Changes in Shareholders’ Equity for the years ended [added: February 3, 2024,] January 28, [removed: 2023,] [added: 2023 and] January 29, 2022 [removed: and January 30, 2021] |

| 21.1 | ​ | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex21d1.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex21d1.htm)] |

| 23.1 | ​ | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex23d1.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex23d1.htm)] |

| 24.1 | ​ | [Powers of [removed: Attorney.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex24d1.htm)] [added: Attorney.](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex24d1.htm)] |

| 31.1 | ​ | [Rule 13a-14(a)/15d-14(a) [removed: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex31d1.htm)] [added: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex31d1.htm)] |

| 31.2 | ​ | [Rule 13a-14(a)/15d-14(a) [removed: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex31d2.htm)] [added: Certification.](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex31d2.htm)] |

| 32.1 | ​ | [Section 1350 [removed: Certifications.](https://www.sec.gov/Archives/edgar/data/56873/000155837023004767/kr-20230128xex32d1.htm)] [added: Certifications.](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex32d1.htm)] |

| 97 | ​ | [The Kroger Co. Policy on Incentive Based Compensation Recovery](https://www.sec.gov/Archives/edgar/data/56873/000155837024004603/kr-20240203xex97.htm) |

| | ​ | |

| Dated: [removed: March 28, 2023] [added: April 2, 2024] | /s/ W. Rodney McMullen |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities indicated on the [removed: 28th] [added: 2nd] of [removed: March 2023.][added: April 2024.]

| /s/ [removed: Gary Millerchip |] [added: Todd A. Foley] | ​ | Senior Vice President and [added: Interim] Chief Financial Officer |

| [removed: Gary Millerchip |] [added: Todd A. Foley] | ​ | (principal financial officer) |

| [removed: Todd A Foley |] [added: Brian W. Nichols] | ​ | (principal accounting officer) |

| * | | [removed: |] Director |

| Nora A. Aufreiter | [removed: |] ​ | ​ |

| * | [removed: |] ​ | Director |

| Kevin M. Brown | [removed: |] ​ | [removed: ​] |

| Elaine L. Chao | [removed: |] ​ | [removed: ​] |

| Anne Gates | [removed: |] ​ | [removed: ​] |

| Karen M. Hoguet | [removed: |] ​ | ​ |

| * | [removed: |] ​ | Chairman of the Board and Chief Executive Officer |

| W. Rodney McMullen | [removed: |] ​ | [removed: ​] |

| Clyde R. Moore | [removed: |] ​ | [removed: ​] |

| Ronald L. Sargent | [removed: |] ​ | [removed: ​] |

| J. Amanda Sourry Knox | [removed: |] ​ | [removed: ​] |

| Mark S. Sutton | [removed: |] ​ | |

| Ashok Vemuri | [removed: |] ​ | [removed: ​] |

| [removed: * By:] [added: *By:] | /s/ Christine S. Wheatley | ​ | ​ |

SIGNATURES

| --- | --- | --- |

| ​ | ​ | ​ |

| /s/ Brian W. Nichols | | Vice President, Corporate Controller and Assistant Treasurer |

| ​ | ​ | ​ |

| * | ​ | Director |

| * | ​ | Director |

| * | ​ | Director |

| * | ​ | Director |

| * | ​ | Director |

| * | ​ | Director |

| * | ​ | Director |

| * | ​ | Director |

| | ​ | |

| ​ | ​ | ​ |

SIGNATURES

| | | ​ | ​ |

| ​ | | ​ | ​ |

| /s/ Todd A. Foley | | ​ | Group Vice President & Corporate Controller |