FEVR, FDEV, Playtech, Itsu, beer duty, Budget lobbying, airports & other:

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A DAY IN THE LIFE:

Familiarity bias is understandable in that, when you’re looking for something, you often find it.

And it works with the news, too. You hear about a shark attack and everywhere, there are sharks.

Or at least there are journalists dashing around looking for big fish with teeth and in the home, you’re obviously much more familiar with the work that you’ve done rather than acknowledge that done by other people.

Hence, when you’ve changed the squeezy soap in the downstairs loo and maybe taken out the bins, you’ll be sure that you’ve done 50% of the housework when, in truth, the total may be low single digits.

However, in the corporate world, there’s an equal but opposite desire to back away from bad stuff because, whilst success has many fathers, failure is fatherless.

This being a phenomenon maybe going on in and around the Oval Office but no doubt we shall see and, in the meantime, let’s move on to the news:

PUBS & RESTAURANTS:

Beer Duty:

SIBA has called on the chancellor, John Healey, to ‘drop the tap tax’ in his first budget on 28 October. It says that the CEBR has concluded that a lower rate of taxation on beer sold in pubs would create 7,600 extra jobs and add some £300m to the UK economy…

• SIBA reports that ‘pubs and breweries are one of the most highly taxed sectors with breweries paying 40% of their turnover in tax.’ That is presumably turnover gross of VAT, which is paid by customers. SIBA adds that ‘the Chancellor can help rebalance this through targeted tax changes on beer that’s sold in pubs via hand-pulls and keg taps through a mechanism called Draught Relief. This is currently set at a 13.9% rate.’

• The CEBR says that ‘expanding Draught Relief to 50% could see 56 million extra pints being poured in community pubs, 7,663 extra jobs and contribute £310 million to the economy. It would also see nearly £120 million in additional taxation going to the tax man, excluding changes in tax collected from excise duty,’ reports SIBA.

• SIBA CEO Andy Slee says ‘lower tax on pub beer improves the economy, creates jobs and means more pub pints are being poured.’ He says that ‘pubs and breweries are a cherished part of our communities and a Drop in the Tap Tax could give them a huge boost in the Chancellor’s Budget.’

Food prices:

The Food & Drink Federation suggests that a prolonged period of inflation in food prices caused by high energy costs and extreme weather is set to continue. It says that food inflation could rise to around 4% by Christmas this year and peak at around 6.4% in July 2027…

• The peak is clearly ahead of inflation – and, as such, it will impact less well-off demographics more acutely than their better-off peers – but it is below the 9-10% forecast when the US and Israel first attacked Iran. FDF CEO Karen Betts says ‘food and drink manufacturers have kept food prices as low as possible during the energy shock since the closure of the Strait of Hormuz, including driving new efficiencies in their operations. But they can’t do this indefinitely.’

• She says that ‘the persistently higher costs of energy, logistics and packing, compounded by this summer’s extreme heat, means that prices will rise this year, and we believe that rise will be sustained into 2027.’ Ms Betts warns that operators could cut back on investment and says that ‘in the end a lack of processing and manufacturing capability in the UK will undermine our food security.’

Disposable incomes:

The RAC warns that the average price of unleaded petrol has risen by 5p a litre in the last week and it says that there is ‘no sign of any relief’ for motorists. Unleaded now costs 167.2p and diesel is also up by 4p at 188.6p…

• The RAC says ‘drivers are having to dig ever deeper into their pockets every time they fill up, and there’s no sign of any relief yet.’ And this is the problem because, with a larger proportion of disposable income going on fuel, there will be less available to spend on non-essential goods & services. The RAC says ‘with the cost of a barrel of oil having averaged $96 for the last week, wholesale prices are surging and that’s already feeding through to prices at the forecourt.’

Budget comments:

UKH has called on the government to help revitalise the hospitality industry in the upcoming Budget. It says that four changes could help businesses within the sector to boost the economy and add jobs. It calls for the government to cut VAT to 10% for hospitality, ‘fix’ business rates for hospitality, reduce employer NICs and deliver devolution by replacing the holiday tax with a tourism bonus…

• Ahead of the Budget, UKH does concede that ‘the change of Prime Minister has seen a more positive approach from Government towards hospitality.’ it adds that ‘the Budget will be the first opportunity to test whether actions meet the positive narrative we have heard around youth employment, high street regeneration and growth in every postcode.’

Demographics:

The British Chambers of Commerce has called on the chancellor, John Healey, to drop the triple lock, which it says will cost taxpayers an extra £20bn a year by 2050 per the IFS. The think tank says that there will be ‘substantial’ pressure on the public finances by that date….

• Any change to taxation policy in this area will have implications for the relative spending power of different demographics. The Triple Lock, which has, at some point, to be unsustainable, increases the power of the ‘grey pound’ – and takes money out of the pockets of other tax payers – whilst a move to drop it would clearly do the opposite. Any implications for the ‘incentive to work’, whilst mired in politics, would also be taken into account.

Other news:

Economy: CBI CEO Rain Newton Smith has said that business leaders are ‘ready to partner with governments to deliver growth and lower living costs’. At the CBI Scotland Annual Dinner, Ms Newton-Smith said that the government should be ‘lowering barriers to UK-EU trade, speeding up planning, reforming the business rates system and providing certainty on major energy and infrastructure projects as practical opportunities to unlock investment, boost productivity and support growth across the UK….’

• Ms Newton Smith says there is ‘a cost-of-living crisis. But it is also a cost-of-doing-business crisis. And the two are inseparable. There is no lasting answer to the cost of living that ignores the cost of doing business.’ She says that ‘there are two costs that have risen to eye watering levels – energy and hiring.’

• The CBI CEO goes on to say that ‘the October Budget must draw a red line under more rises in the cost of hiring, investing and doing business.’

• She adds ‘we can say it now; Brexit was bad for business. Bad for our economy, reducing our GDP by as much as 8 per cent. Business leaders I speak to do not want to relitigate the politics of it. Nor do they want to rejoin at any cost or on any terms. But they do want both sides to get on and reduce the barriers, because the status quo won’t cut it for growth.’

WFH. Former England manager Sir Gareth Southgate has said that he believes working from home is bad for younger workers as the would benefit from having workplace mentors to develop their careers.

COMPANY NEWS:

Itsu. The group has announced record revenues in its latest accounts with sales up 14.1% to £201m and profits up to £4m from a loss last year of £6.9m. Furthermore, Sky News reports that Bridgepoint, the private equity backer of Itsu, the Japanese casual dining chain and grocery supplier, ‘is preparing to sell its stake as the company’s founder plots an ambitious plan to grow annual sales to over £500m.’ it says that Bridgepoint ‘is working with Goldman Sachs on a potential sale of its minority interest’ and adds that ‘City sources said that a process was expected to kick off within months, with Itsu founder Julian Metcalfe keen to attract a major investor capable of accelerating the brand’s international growth…’

• Bridgepoint invested in the business some five years ago. The company says ‘our grocery business enjoys year after year of record growth as customers seek out value and quality, with a global partner now able to invest in the company taking on the Bridgepoint holding.’ Founder, Julian Metcalfe, says ‘I look forward to ensuring our sales pass the £500m mark soon.’

• The company reports that its ‘directors believe that, despite continued inflationary pressures on household budgets and operating costs, the actions taken in 2025 (including investment in the operating model and the Academy) position Itsu to drive like-for-like transaction growth and strengthen the unit economics. In 2026, the focus will remain on upgrading priority sites, optimising throughput and service, while selectively pursuing high-quality equity openings in high-footfall UK locations and progressing targeted UK and European franchise opportunities.’

Stonegate Group is reported to have identified c100 currently-managed pubs to transfer into its Pub Partners business as part of its ongoing estate development….

• Stonegate says ‘our strong performance, including a record half year of profit growth in the first six months of this year, continues to demonstrate the success of our strategy, ensuring that every site is positioned for success, in the right operating model.’ It adds that ‘as a result of operating a smaller managed estate, we are entering consultation on a number of proposed changes within our support teams.’ There will be a number of job losses.

US sandwich chain Jersey Mike’s is set to make its European debut in Soho later this year. The company is reported to have three further London locations identified as a part of its planned UK rollout.

Knoops has reported rather historic numbers for the year to end-March 2025 saying that sales for the year to that date up 68.8% at £15.8m. The group reports that its operating loss widened to £3.3m from £1.7m last year. It reports a loss before tax of £3.4m (FY24: loss £1.7m)…

• The company reports that ‘since the year end, the Group has continued to execute its growth strategy, with store openings in Colchester and Cardiff in the UK, together with two further franchise openings in the Middle East.’

• It says that ‘progress has also been made on plans for further franchise territories, and the opening of the Group’s first owned store in the US is planned for August 2026.’

• Overall, ‘the Group’s strategy remains focused on developing its UK store portfolio, growing its ‘Knoops at Home’ product range and multi-channel distribution, increasing production capacity and developing selected international markets through a combination of owned stores and franchise arrangements.’

Brakspear cask ales including the flagship Brakspear Original Gravity bitter are now being brewed at Hogs Back Brewery in Tongham, Surrey. The move will lead to a significant investment in installing traditional ‘double drop’ brewing vessels at the Hogs Back site.

The FT today reports that Starbucks is betting $1bn on making its cafés feel more like comfortable ‘community lounges’ in order to appeal to customers, particularly those who may be working from home and who would otherwise lack human interaction.

FEVER TREE – H1 NUMBERS:

Fever Tree has this morning reported H1 numbers and our comments are set out below:

Headline numbers:

• Fever Tree reports total adjusted revenue of £183.6m, up 7% on last year. Adjusted EBITDA is £20.1m, up 9%.

• The group reports PBT of £14.6m against £11.2m in the prior year and diluted EPS is 9.44p compared to 6.82p. The H1 dividend is to be raised by just 2% to 6.09p. 

Trading comment:

• Fever Tree reports that ‘US momentum [is] building under the Molson Coors partnership.’

• It says that it has seen ‘positive operational and strategic progress delivering 11% revenue growth at constant currency.’

• It adds that ‘sales momentum [is] building as we progress through the year, supported by Fever-Tree’s first national US marketing campaign, together with strong distributor execution.’

• The group says that ‘the UK saw a return to growth, driven by a strong Off-Trade performance and market share gains.’

• The company notes ‘continued strong momentum across the portfolio globally, with tonic revenue increasing 3% and the wider portfolio growing 13% and now represents almost half of Group sales.’

Outlook:

• Fever Tree reports that the company is ‘well hedged with regards to glass and aluminium costs’ and says ‘our expectations for FY26 remain unchanged and in line with market expectations.’

Cash & balance sheet:

• Fever Tree reports that its ‘cash generative business model [is] supporting growth and shareholder returns.’

• It says that its ‘£60 million share buyback programme [is] underway following the successful £100 million programme completed in FY25, supported by a strong balance sheet and £68 million cash position.’

CEO comment:

• CEO Tim Warrillow reports ‘we’ve made strong progress in the first half of the year.’

• He says ‘in the US, our partnership with Molson Coors is delivering, with sales momentum building, market share increasing, and our first national marketing campaign helping bring the brand to more consumers than ever before.’

• The CEO adds ‘it’s also been encouraging to see the UK return to growth’ and says that the group’s brands ‘demonstrate how the Fever-Tree brand can thrive whether consumers are choosing to drink alcohol or not.’

• Mr Warrillow says ‘we have continued to trade well through the summer and are confident in delivering market expectations for the full year.’

• Overall, he concludes ‘our diversification strategy is expanding the opportunity for the brand, while our increasingly cash-generative business model allows us to invest behind future growth and deliver attractive returns to shareholders.’

Langton Comment:

• Fever Tree’s shares were buoyed early last year by the announcement of the partnership with Molson Coors (and the news that Carlsberg had purchased rival Britvic), but they have since edged back and stabilised at lower levels.

• The valuation, however, is still stretched on many measures, suggesting that the market has been struggling with the question as to how to value Fever Tree shares for some time,

• The brand is strong but the shares are not cheap in absolute terms, despite the material fall from their end-2021 highs of over £27.

• Fever Tree’s market cap is still considerably more than twice revenue. And, with the shares trade at over 40x historic earnings with a 2% yield, there is little by way of yield support and valuation remains an issue.

• Nevertheless, the partnership with Molson appears to be working well and the company sees buying shares back as one of the best uses for its capital in the medium term.

HOLIDAYS & LEISURE TRAVEL:

TTG reports the Advantage Travel Partnership as saying that travel agents are winning a new generation of customers, while holidaymakers are becoming increasingly likely to book later and opt for shorter breaks.

Travel disruption. This continued into yesterday with the BBC reporting that ‘tens of thousands of people saw their travel plans upended as airlines cancelled 327 flights, according to aviation analytics firm Cirium, after 1,750 flights were axed on Tuesday after the problem emerged….’

• Nats boss Martin Rolfe, who has led the service for 11 years and who was paid some £1.4m in the year to March, would appear to be struggling for friends. Ryanair is calling for his dismissal and Transport Secretary Heidi Alexander yesterday said she had ‘significant concerns’ about the widespread disruption. She has given Nats, where she called Mr Rolfe in to explain the situation yesterday, a week to report back in detail on what went wrong.

• Ms Alexander has said that ‘I do not believe this issue was unavoidable’ in a comment that may have longer term implications for Nats. Or at least for its boss. She says there will be ‘tough questions about resilience of Nats systems’ and she told the Commons ‘we also need to think about consumer redress issues.’ Airlines UK has said ‘accountability should sit where responsibility lies and the Civil Aviation Bill offers the opportunity to address this.’

Premier Inn owner Whitbread has announced that it has ‘extended the programme of repairs at its Exmouth Seafront hotel after investigations identified more extensive work is required to parts of the building’s exterior.’ It says that ‘the hotel remains structurally sound and continues to welcome guests as normal.’

FRONTIER DEVELOPMENTS – FULL YEAR ANALYSTS’ CONFERENCE CALL:

Frontier Developments, which would appear to be doing something right, saw its shares rise by some 16% or 71p yesterday as analysts digested the implications from its full year numbers. Below, note on the conference call:

Following the release of its FY26 numbers, Frontier Developments hosted a conference call for analysts and our comments thereon are set out below:

Trading comments:

• See also earlier Flash Note.

• The business model is now ‘fundamentally de-risked’. Recurring revenue and ‘long term franchise economics’ are the priority.

• Revenue, up 16%, is the second highest ever. The margin has ‘ticked down’ to 66.7% from 69.9% due to the success of JWEIII. As Planet Zoo will be the launch in FY27, margin should rise this year. Operating profit for FY26 is at an all-time high.

• Tax credits are up 88% to £12.8m. This is transitioning to a new tax scheme but FDEV says it is credited when expenditure is incurred. Ongoing tax credits should be £8m to £9m.

• A one-off tax credit of £4.4m is not included in the above numbers.

Strategy, focus & outlook:

• The company will ‘continue to nurture’ its portfolio of games and grow the CMS portfolio via both existing franchises & new IP.

• There will be ‘one new CMS game per year’. The focus here is a) a good game and then b) add product and retain engagement. Own IP includes Zoo, Coaster and a new game in FY27. Licensed IP comprises Jurassic World and now Disney.

• The majority of sales come after rather than at launch. The cash flow implications (as added costs are marginal) are very healthy. The lifetime return of Planet Zoo, for example, over 4 years, is some 404%.

• Capital allocation is unchanged – create long-term shareholder value, then consider share buybacks and finally special dividends.

• Re buybacks, the company will renew its authority at the AGM in October – and ‘buybacks are likely to feature in FY27’.

• The strategic reset ‘has transformed Frontier’. The group is ‘confident in delivering FY27 in line with expectations’. There is a ‘clear plan and a strong roadmap of new content and new CMS games’.

Management:

• Jo Cooke’s elevation to CEO and David Braben’s move to a NED role is ‘not a change in direction’ as the ‘focus on CMS games is working.’

Q&A:

• Planet Zoo II:

o Advance sales are ‘very, very positive’. There is an event for Press & some users at Chester Zoo this weekend. It is ‘multi-platform’ and should beat Planet Zoo II. Should be £25m to £30m in revenues initially.

o Development budget for Zoo II around £17m. Other games should be ‘say £13m to £15m’.

• Next own-IP game – FY28:

o Dev cost maybe a bit lower as the group tests the water.

o When will you announce a name & release date? More likely to be January as the company ‘wants to give Planet Zoo II a bit of space’. This game ‘is being road-tested with users ‘behind closed doors’’.

• Disney game:

o Dev cost here could be £20m. The company wants to really crack this.

o Will Disney help with marketing? Disney is no stranger to the idea of having IP partners. They know how to monetise opportunities. There is no contractual obligation for Disney to support the game – but it makes financial sense.

o Will the gross margin be similar to Jurassic World? Royalties may be ‘around 15% or so after deducting PlayStation & Steam commissions.

• Other games:

o Elite Dangerous. Will you continue to invest in it? Yes, it is ‘baked into Frontier’s history’ and it continues to generate cash but CMS is the core.

• Accounting:

o Surplus cash: How do you calculate how much this is? The group maybe ‘only needs around £20m’. So the current £50m is ‘a bit on the high side’. There is a 10% limit on buybacks. There almost certainly will be more of these. 

o Capitalised costs: This has reduced. More conservative.

o Tax. The Disney terms will be similar to Universal.

• Cross-selling: The group starts with the audience & drills down to subject matter. New subject matter minimises cannibalisation. Discounts in one area can drive sales of other products.

Langton Comment:

• See also earlier Flash Note.

• FDEV shares have more than quadrupled since their post-Covid lows but, with a secure platform of existing games and an exciting schedule of upcoming releases – in addition to currently having £50m plus in the bank – the shares remain attractive.

• Planet Zoo II will launch on 13 October and, as the company is revealing it to Press and influencers this weekend, feedback will shortly be forthcoming. The company seems genuinely excited.

• We have included both five year and one year charts in order to illustrate the peaks to which the shares were driven during the pandemic.

• The levels during the Covid lockdowns were clearly – at least with the benefit of hindsight – unsustainable but it is worth noting that there are, after the group’s two recent share buy-back programmes, fewer shares in issue now than there were in 2020.

• Further buybacks (very, very likely) and more special dividends (likely) are likely to feature.

• Multiples of revenue are more often than not the measure used and, on this basis and with a very solid JWEIII launch now under its belt and Planet Zoo II to come – in addition to the Disney game mentioned earlier this month – FDEV’s shares look to offer good value.

OTHER LEISURE:

Playtech has reported H1 numbers saying that revenue rose by 10% to €425.1m with EBITDA up 77% at €162.5m. The group reports a post tax profit of €85.0m, up from €16.6m in the prior year. EPS is 33.1c (up 513%)…

• CEO Mor Weizer says ‘Playtech has delivered a first half significantly ahead of our expectations at the start of the year, demonstrating the strength of our technology, the quality of our customer partnerships and the disciplined execution of our strategy.’

• He says ‘we saw continued momentum in regulated markets, particularly in the Americas. The US delivered an outstanding performance, driven by our partnership with Hard Rock Digital, while we also saw another excellent period of growth in Latin America through our revised agreement with Caliente Interactive and we continued to scale our market-leading Live offering. ‘

• The CEO says ‘looking ahead, we are focused on extending our presence in regulated and regulating markets, deepening our customer relationships and continuing to invest in our products and technology offering including further leveraging the benefits of artificial intelligence. We see substantial opportunities for further growth and remain confident in the long-term potential of the business.’

• He concludes ‘our balance sheet remains strong, and we are well-positioned to invest as required and also return capital to shareholders. We remain confident in achieving our ambitious medium-term targets and see exciting opportunities for the Group across our markets.’

Newbury Racecourse has reported H1 numbers saying that its turnover increased by 6% to £10.29m and the consolidated group loss on ordinary activities before tax was £0.05m compared to a loss of £0.15m in the prior year….

• The company chair, Dominic Burke, reports that ‘trading for the first half of 2026 is in line with Company expectations.’ He says ‘compared with the first six months of last year, our revenues have grown across the majority of our income streams, but due to our continued commitment to prize money, the impact of high inflationary costs, the increase in the National Living Wage and Business Rates, the Company has only been able to reduce losses compared to the same period last year. We remain confident in the delivery of a positive financial outturn for 2026.’

Gym Group shares finished trading yesterday up some 7% or 13p on the back of the group’s reassuring H1 report.

Apple has unveiled its first ever folding phone.

Sky News reports that IG Group, the London-listed online trading platform, is cutting jobs ‘just weeks after unveiling a $1.3bn deal to buy a major US-based prediction markets operator.’

FINANCE & MARKETS:

The Metropolitan Police has launched a criminal investigation into Reform UK and its funding, specifically claims made by Reform fundraisers that they had raised money from overseas donors, which is illegal….

• Despite comments made by Nigel Farage associate and key long-term media aide Dan Jukes that money had been raised in the way suggested above, Reform ‘denies any wrongdoing’. It says it ‘will fully cooperate with the investigation’ and it will make no further comment. The Met says it is liaising ‘closely with the Electoral Commission and Crown Prosecution Service as enquiries progress.’

Sterling mixed to slightly stronger at €1.1644 and $1.3552. Oil up around $2 – and through $200 again in the wrong direction – at $100.90. UK 10 year gilt yield up 6 basis points at 5.26%. World markets lower yesterday and London set to open broadly unchanged as at 6.30am.

RETAIL WITH NICK BUBB:

• Today’s News: As well as the much-awaited John Lewis Partnership interims (see below), we have had an ABF/Primark trading update and the Currys AGM update. Later today we get the ProCook AGM (at 11am) and the Halfords AGM (at 3pm), but neither company is expected to issue a trading update. The Primark Q4 trading update (for the 12 weeks to Sept 12th) is weak, with LFL sales around 3% down (‘broadly flat’ in the UK and down 4.3% in Europe), but the Currys AGM update (for the 17 weeks to Aug 29th) is notably strong, with LFL sales in the UK business up 6% and the Nordics up 9%, albeit the company is not upgrading full-year guidance.

• John Lewis Partnership Interims: Ahead of today’s JLP interims (for the six months to end July), we flagged last Friday that there has been plenty of speculation about tough trading in the John Lewis department store business and we assumed that overall H1 sales would have been something like 3% down, with ‘big ticket’ products taking a beating, but on an ex-VAT basis the fall was 4% and the biggest fall (-4.8%) was in Fashion. And, despite good work on margin and cost control, that sort of top-line drop hit the bottom line at John Lewis, with the usual H1 operating loss up from -£53m to -£83m this year (we expected -£80m). The hope might have been that Waitrose could help to make up the JL shortfall, but the business has been investing heavily in store refurbishments etc and although there was 2.8% sales growth at Waitrose in H1, there was a bit of margin pressure and that the
heatwave brought higher supply chain costs, so Waitrose operating profits in H1 were slightly down, from £110m to £103m (we expected £105m). On that basis, we had pencilled in a much higher overall H1 pre-tax loss for JLP (before exceptionals), from -£33m in H1 year ago to -£90m and that was pretty accurate, as the outcome was £-89m. Usually the H1 investment programme would be expected to pay off in the seasonally more important H2, but JLP are ‘cautious’ about the outlook, given the uncertainties about the Autumn Budget etc.      

• Yesterday’s News: Despite reporting decent sales growth, the interim results from the fashion giant Inditex/Zara yesterday morning were not well received by investors, with the shares falling by 3.6% on the back of operating cost pressures. However, the American jewellery giant Signet (which owns the UK chains of H Samuel and Ernest Jones) delighted Wall Street with its Q2 results (for the 13 weeks ended August 1) at lunchtime yesterday and the shares jumped by c24% in response. Q2 sales were up by a solid 1.9% LFL in the core US business, but the UK business saw strong LFL sales growth of 6.0%, boosting overall Q2 LFL sales growth to 2.2%, and investors were delighted by news of another share buyback programme and an increase in full-year profits guidance: the Signet CFO Joan Hilson said “Given the strength of our cash position, we intend to enter into a $125m share repurchase
programme this month which will bring our year-to-date capital returns to 12% of recent market cap. We are raising our full year adjusted EPS guidance by over 10% to reflect year-to-date operating performance, additional share repurchases, refunds of tariffs previously paid, and the terms of the new consumer credit agreement”.    

• Today’s Press: In terms of the front-page News headlines, according to the press summary email from the Guardian, the Guardian itself leads with “Police launch inquiry into alleged overseas donations to Reform UK”. The Times says “Farage faces Met inquiry over Reform donations”, the i Paper also has “Police set to interview Farage over Reform UK donations”, and the Mirror writes “Farage faces cop quiz on donors”. The FT has “US spy chief to take stronger role in stalled Ukraine talks”, the Mail runs with “Burnham: National security can’t come at the expense of social security”, and the Express leads with “The King has spoken with Harry since return”. The Telegraph splashes “Labour’s new tax assault on hospitality”, and, on the air traffic chaos, the Metro has “Ready for departure?”.

• News Flow This Week: Tomorrow lunchtime the supermarket giant Kroger releases its Q2 results (in the US).