Mike Montani

Darren said trends were similar to recent quarters; all 3 income cohorts grew, with grocery softness driven by category trends in beer, snacks and cigarettes rather than demographics.

Darren detailed a balanced 3% traffic / 2.5% ticket split driving the 5.5% same-store comp, with minimal pricing action.

Darren said CapEx is light: just commercial fryer plus small wares, electrical and vent hoods already exist. Labor added via time-motion-based modeling per store, typically incremental hours not full FTE at this stage. Allocations flex with actual volume.

Steve said G&A synergies slightly ahead of plan, fuel supply agreements converged this quarter (same volume benefit), pricing taken over day 1. 50 stores with existing kitchens converting now, another 50 by fiscal year-end. Prepared food synergies (40% of $45M) ramp in H1 FY27.

Darren said wings create another occasion with strong value proposition. Getting great quality/price feedback in test market. Pizza value resonating as consumers become more value-conscious, Casey's competing with QSR on quality at better prices.

Darren said comp stepped down Aug-Sep-Oct due to tougher prior-year comparisons, but two-year stack accelerated from 6.5% to 7.5%. Consumer research shows middle/upper cohorts neutral-to-positive on economy, lower-income under pressure but maintaining visit frequency. Value proposition resonating as guests become more discerning.

Darren said small-deal M&A business as usual with good seller interest. Large-deal conversations happening but nothing active. Steve confirmed no change to seasonal earnings cadence; will update guidance at Q2 call with 7-month visibility.

Steve said Q4 traffic slightly negative entirely due to February weather (mid-single-digit negative that month), positive in March and April. FY26 guide assumes modestly positive traffic with more ticket growth from mix and price.

Low-income (<$50K) consumers are only 25% of guest base and still growing, just 100-300bp softer. Pizza pricing $1+ below national competitors in overlapping trade areas.

Private label products just entering stores, full rollout over 9-12 months. M&A environment favorable as smaller independents under pressure, good deal flow on smaller transactions.

Darren said no real G&M margin headwinds expected; mix evolution should stick. Steve noted seasonal mix dilution in Q3 (less ice) and that cheese headwind is improving.

Mark confirmed fuel prices impact both COGS (inbound transport) and SG&A (operations/logistics), but expects the Q2 impact to be within the normal range of quarter-to-quarter fluctuations.

Ernie said fundamental gains can be shared with customers while still reaching 13.5% EBITDA margin. Path to margin target is straightforward through leverage and ad normalization, so incremental gains go to customers.

Confirmed seasonal wholesale GPU decline in Q4 driven by higher depreciation rates and lower auction volumes. Expects similar sequential pattern to prior year on per-unit basis.

Q4 advertising expected similar to or slightly higher than Q3 on a dollar basis. Framed as investment in building awareness, understanding, and trust.

Marketplace and ADESA Clear digital auction expanding. Third-party reconditioning and logistics are opportunities but not near-term focus.

No fundamental supply constraint. EBITDA margins across public auto retailers returning to 2019 levels indicating stable competitive environment.

Growth now about market share penetration within existing markets rather than geographic expansion. Cohorts back near 2022 peak levels.

David guided Q1 at lower end for IDs, gross margin, and EPS due to egg deflation, then fairly consistent through year. Greg outlined 5 hallmarks: fresh food anchor, convenience/speed, affordability with better experience, local brand identity, and personalization through 84.51 data.

David declined 2026 guidance but explained IRA mechanics: Medicare-only, manufacturers rebate the difference, no margin or earnings impact. Tailwinds include improving core grocery units, Our Brands headroom, and a range of core business initiatives.

Ron said they'll share a path to profitability with timeline in Q3 update but won't disclose dollar amounts. Review still ongoing. David confirmed e-commerce strategic review outcomes are not included in current guidance.

Todd noted both traffic and ticket contributed to Q4 ID sales, skewing slightly toward ticket. Declined to quantify GLP-1 impact, saying KR's experience was 'very similar to what others have talked about.'

Michael asked about fuel CPG, which Kroger stopped disclosing in detail a few quarters ago. Management only confirmed both gallons and CPG were down.

Creedon noted AUR approximately $1.50 versus ~$1.34 prior year, framing increase as value play rather than inflation. Glendinning added multi-price penetration growth will continue lifting AUR independent of pricing decisions.

Glendinning clarified TSA income reduced to $55-60M from prior $85-90M as buyer needed fewer services, but offset by stock compensation and payroll savings. FY2026 gap identified but manageable with runway.

Management credited alternate sourcing, new brand introductions, and house brand (Duralast) mix shift. Running merch margin playbook with intensity to mute or fully offset commercial mix drag.