Kroger Company (The) (KR) Earnings

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Oct 2026upcoming

Next quarter

Expected to report Dec 3, 2026 — estimated from last year’s reporting date.

Consensus is $1.18 EPS for Oct 2026 across 8 estimates, ranging $1.14 to $1.22.

KR Jul 2026

Reported Sep 11, 2026 · before the open

: 3.81%

: $1.05
: $1.09
: —
: $34.62B

Reported results

: $34.62B; from $33.94B
: $971.00M; from $863.00M
: 2.80%; from 2.54%
: $641.00M; from $609.00M
: $1.05; from $0.91

Highlights

Adjusted earnings: Adjusted EPS was $1.09, up 5% year over year and $0.04 above the $1.05 consensus; GAAP diluted EPS was $1.05 versus $0.91 a year ago.
Sales momentum: Identical sales excluding fuel increased 0.2%, down from 3.4% a year ago, while total sales rose 2.0% to $34.62 billion.
Guidance reset: Kroger lowered full-year identical-sales guidance excluding fuel to 0.2%-0.8% from 1.0%-2.0%, while maintaining adjusted EPS guidance of $5.10-$5.30 and FIFO operating profit guidance of $5.0-$5.2 billion.
Profit protection: Adjusted FIFO operating profit was $1.076 billion, down from $1.091 billion a year ago, as a 13-basis-point improvement in FIFO gross margin was offset by a 33-basis-point increase in the OG&A rate.
Sales headwinds: Management estimated a 265-basis-point drag on identical sales from the Inflation Reduction Act, generic-drug mix, egg deflation and the Cyclospora produce issue; the IRA alone reduced identical sales by approximately 140 basis points.
Digital and media: Adjusted eCommerce sales grew 20% and Kroger Precision Marketing profit increased 24%, supporting the company's second consecutive quarter of profitable eCommerce growth.
Private brands: Private Selection sales increased more than 14%, total brand sales grew faster than national brands and private-brand penetration rose approximately 50 basis points.
Capital returns: Kroger repurchased $1.0 billion of shares during the quarter and $1.2 billion year to date, leaving approximately $800 million under its $2.0 billion authorization; it also raised its dividend 11%.

Analysis

Kroger's second quarter was a profit-protection quarter rather than a sales-growth quarter. Adjusted EPS of $1.09 exceeded the $1.05 consensus and grew 5% from $1.04 a year ago, while GAAP EPS rose to $1.05 from $0.91. Total sales increased to $34.62 billion from $33.94 billion, but identical sales excluding fuel advanced just 0.2% versus 3.4% last year. Against the supplied prior-quarter figures, net income of $641 million and diluted EPS of $1.05 were below $903 million and $1.46, respectively, although the reported quarter figures are not directly comparable in duration and sales composition.

The defining issue was weaker top-line momentum: management cited a 265-basis-point combined drag from pharmacy changes, generic substitution, egg deflation and Cyclospora. Kroger offset much of that pressure through savings, pharmacy mix, fuel, media and better eCommerce economics. Adjusted FIFO operating profit was $1.076 billion versus $1.091 billion a year ago, while FIFO gross margin expanded 13 basis points. The company therefore preserved its $5.10-$5.30 full-year adjusted EPS outlook despite cutting identical-sales guidance to 0.2%-0.8%. The investment case now rests more heavily on executing its multiyear value plan, improving store standards and scaling profitable digital and private-brand growth.

Guidance and sales

Kroger preserved its earnings outlook despite a material reduction in the sales outlook. Full-year identical sales excluding fuel are now expected to rise 0.2%-0.8%, versus the prior 1.0%-2.0% range, while adjusted FIFO operating profit remains $5.0-$5.2 billion and adjusted EPS remains $5.10-$5.30. Management expects third-quarter identical sales to be slightly better than fourth quarter, with continued Cyclospora effects in Q3 and a larger pharmacy headwind, weather comparisons and the cycling of prior delivery-partnership benefits in Q4.

Quarterly sales: Identical sales excluding fuel rose 0.2%, compared with 3.4% a year ago; total sales rose 2.0% to $34.62 billion.
Demand environment: Traffic increased slightly, but ticket declined as customers bought fewer items amid high fuel prices, reduced SNAP benefits and softer confidence.
Market position: Management said Kroger maintained or widened its sales gap versus Circana's traditional-grocery rest of market during the first half.

Margin and cost discipline

The quarter showed Kroger using cost savings to support customer value without abandoning its profit targets. Adjusted FIFO operating profit declined modestly to $1.076 billion from $1.091 billion, but the FIFO gross margin rate excluding rent, depreciation, amortization and fuel increased 13 basis points. Savings from sourcing and procurement, eCommerce profitability, media, pharmacy mix and lower LIFO expense helped offset shrink, transportation and value investments.

Reported profitability: Operating profit increased to $971 million from $863 million, while GAAP net income attributable to Kroger rose to $641 million from $609 million.
Gross margin: GAAP gross margin declined to 22.4% from 22.5%, reflecting higher shrink, transportation costs, fuel mix and customer-value investments.
Operating costs: The OG&A rate increased 33 basis points because of associate-wage investments, higher healthcare costs and sales deleverage, partly offset by productivity and lower incentive costs.
Savings model: Management expects FIFO gross-margin growth to remain positive through the second half as savings ramp and fund further value investments.

Digital and retail media

Digital was one of the clearest operating positives. Adjusted eCommerce sales grew 20%, excluding the effects of fulfillment-center exits, the Vitacost sale and the discontinued Ship Marketplace. Kroger described this as its second consecutive quarter of profitable eCommerce growth, with faster delivery, in-store fulfillment and pickup execution supporting the improvement.

eCommerce economics: Adjusted eCommerce sales increased 20%, with profitability improving enough to contribute positively to FIFO gross margin.
Retail media: Kroger Precision Marketing profit grew 24%, with media up 88 basis points; management called it the company's strongest performance since 2021.
Customer acquisition: Online deal days helped attract new customers, which increased 20% year over year.
Convenience: Kroger launched combined grocery and eligible-prescription delivery with Instacart across nearly all banners and is seeing growth in delivery orders completed in less than an hour.

Brands and value strategy

Kroger is pursuing a multiyear value and merchandising program rather than a one-quarter pricing reset. The approach combines lower shelf prices and simpler promotions with better in-stock execution, fresh food, prepared meals and a broader private-brand portfolio. Management said savings from cost of goods, procurement, goods not for resale and productivity will fund the investments.

Private brands: Private Selection sales rose more than 14%, while total brand sales grew faster than national brands and penetration increased approximately 50 basis points.
Merchandising: Natural and organic, meat and seafood, bakery, deli and prepared meals outperformed total sales; Kroger added more than 600 natural and organic items.
Opening price points: SmartWay, Kroger's opening-price brand, is planned to expand from approximately 130 items toward 1,000 over the next year and a half.
Store execution: On-shelf availability reached a record high and pickup perfect orders were described as the best ever; Kroger also completed 12 major store projects.

Capital allocation and M&A

Kroger continued to return capital while retaining flexibility for investment and the planned Giant Eagle acquisition. Net total debt to adjusted EBITDA was 1.91, below the company's 2.30-2.50 target range but up from 1.63 a year ago because cash declined and share repurchases increased. Management expects to complete the remaining buyback authorization by fiscal year-end and still expects the Giant Eagle transaction to close in 2027, subject to regulatory review.

Share repurchases: Kroger bought back $1.0 billion of stock in the quarter and $1.2 billion year to date, leaving approximately $800 million of the $2.0 billion authorization.
Dividend: The quarterly dividend increased 11%, marking the 20th consecutive year of dividend increases.
Balance sheet: Net total debt was $15.52 billion versus $13.29 billion a year ago; the company continues to target investment-grade credit.
Investment: Full-year capital expenditure guidance remains $3.8-$4.0 billion and free-cash-flow guidance remains $2.7-$2.9 billion.

Kroger Company (The)

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