The Kroger Co.'s Stock Analysis

Kroger Reports Second Quarter 2025 Financial Results and Guidance

The Kroger Co. reported total sales of $33.9 billion for the second quarter of 2025, matching the same period last year. Excluding fuel and sales from Kroger Specialty Pharmacy, sales increased by 3.8%. The company's gross margin improved to 22.5% compared to 22.1% in the previous year, driven by lower supply chain costs and reduced shrink, despite challenges from the pharmacy sales mix and price investments. Kroger also reported a LIFO charge of $62 million for the quarter, an increase from $21 million a year ago.

Kroger has raised its guidance for identical sales growth without fuel to a range of 2.7% to 3.4% for the remainder of the year. The adjusted FIFO net operating profit and adjusted earnings per diluted share guidance have also been increased, now projected between $4.8 to $4.9 billion and $4.70 to $4.80 respectively. The company is committed to maintaining its dividend and has initiated a $5 billion accelerated share repurchase program, which is expected to be completed in the third quarter of 2025, with plans to resume open market repurchases thereafter.

Sep 11, 2025 08:14:26

Kroger Addresses Tariff Impact and Pricing Strategy

During Kroger's 2025 Annual Meeting of Shareholders, the Interim CEO discussed the company's approach to the changing tariff situation. He indicated that Kroger is less affected by the proposed tariffs compared to competitors and is working with suppliers to source products from less impacted areas. The CEO emphasized that Kroger views price increases as a last resort and is committed to avoiding them in order to provide value to customers. The company aims to maintain affordability for consumers amid the current economic conditions.

Jun 27, 2025 16:12:34

Kroger Reports First Quarter 2025 Results and Sales Update

Kroger Co. reported total company sales of $45.1 billion for the first quarter of 2025, compared to $45.3 billion in the same period last year. The sales growth, excluding fuel and adjustment items, was 3.7%. The gross margin improved to 23.0%, driven by the sale of Kroger Specialty Pharmacy and lower supply chain costs, despite a mix effect from growth in pharmacy sales which typically have lower margins. The company also recognized a $100 million impairment charge related to the planned closing of around 60 stores over the next 18 months, which is expected to yield modest financial benefits without impacting full-year guidance. 

Kroger has raised its guidance for identical sales without fuel to a range of 2.25% to 3.25% for 2025, reflecting confidence from strong first quarter results. The company plans to continue paying dividends and executing a $5 billion accelerated share repurchase program, which should be completed by the third quarter of 2025. Kroger's net total debt to adjusted EBITDA ratio is currently 1.69, indicating a stable financial position that allows for continued investment in business growth and shareholder value.

Jun 20, 2025 08:06:51

Kroger Reports Fiscal 2024 Sales and Margin Changes

Kroger reported a decrease in total company sales for the fourth quarter of fiscal 2024, amounting to $34.3 billion compared to $37.1 billion in the previous year. However, excluding certain factors, sales increased by 2.6%. The gross margin improved slightly to 22.7% from 22.3% year-over-year, driven by the sale of Kroger Specialty Pharmacy and lower shrink, though this was partially offset by lower pharmacy margins. The company also faced a LIFO charge of $30 million, contrasting with a credit of $18 million from the previous year, and an increase in operating costs due to higher incentive plan expenses and investments in associate wages.

For the entire fiscal year 2024, total sales were $147.1 billion, down from $150.0 billion in 2023. The gross margin increased to 22.3% from 21.8% the previous year, attributed to the same factors affecting the fourth quarter. The LIFO charge for the year was $95 million, a decrease from $113 million in the prior year. Additionally, the company's net total debt to adjusted EBITDA ratio rose to 1.79 from 1.33, indicating a shift in financial leverage. Despite these challenges, Kroger plans to continue its share repurchase program and maintain its dividend, aiming for long-term growth.

Mar 06, 2025 08:14:27

Kroger CEO Resignation and Leadership Changes Announced

Kroger Co. has announced the resignation of CEO Rodney McMullen following a Board investigation into his personal conduct, which was inconsistent with the company's ethics policy but unrelated to its business operations. Ronald Sargent, the Lead Director, has been appointed as the interim CEO and Chairman of the Board, while Mark Sutton has taken on the role of lead independent director. The Board has initiated a search for a new CEO and emphasized Sargent's commitment to maintaining the company's strategic direction during this transition.

Despite the leadership change, Kroger expects its full-year Identical Sales without fuel to be at the high end of its guidance range and anticipates its full-year Adjusted Earnings Per Share to slightly exceed the high end of its guidance range. The company plans to report its fourth quarter and full-year results in March 2025. The Board expressed confidence in Sargent's leadership and experience as they continue to focus on delivering value to customers and stakeholders.

Mar 03, 2025 07:10:52

Kroger Appoints New CFO David Kennerley Amid Transition

Kroger has announced the appointment of David Kennerley as the new Chief Financial Officer, effective April 3, 2025. Kennerley, who has extensive experience with PepsiCo, will join Kroger on March 10, while the current interim CFO, Todd Foley, will ensure a smooth transition until the end of the fiscal year 2024. Foley has been recognized for his contributions during his interim role and will continue to support the company as a senior vice president until the first quarter ends.

On the downside, Todd Foley's retirement marks the end of a significant tenure at Kroger, where he has held various finance roles since 2001. His departure may create uncertainty as the company transitions to new leadership under Kennerley, who has a strong background but is new to Kroger's specific operational context. The leadership change comes at a time when the company aims to maintain its strategic focus on providing fresh, affordable food to families across America.

Feb 13, 2025 16:22:43

Kroger Terminates Merger with Albertsons, Redeems $5.7 Billion Notes

Kroger has officially terminated its merger agreement with Albertsons, which was initially set to integrate the two companies. This decision triggers a mandatory redemption of $5.7 billion in senior notes, with Kroger planning to pay 101% of their principal amount plus accrued interest on December 18, 2024. This move reflects Kroger's commitment to restructuring its financial obligations following the dissolution of the merger plans.

However, the termination of the merger could have significant implications for Kroger's future financial performance. The company faces various challenges, including potential labor negotiations, competitive pressures, and economic uncertainties that could impact its sales and profitability. Additionally, Kroger's ability to manage its growth strategy and maintain customer loyalty may be tested in this changing landscape.

Dec 12, 2024 18:26:39

$7.5B Share Buyback Program Announced by Kroger

Kroger has reaffirmed its commitment to lowering grocery prices and investing in its workforce, having invested $5 billion in price reductions since 2003 and $2.4 billion in wage increases since 2018. The company is also focused on enhancing its store network and community support through significant capital investments, which are expected to bolster customer experience and job opportunities.

On the negative side, Kroger terminated its merger agreement with Albertsons due to a court ruling that blocked the merger, indicating a setback in its growth strategy. Additionally, the company will redeem $4.7 billion in senior notes related to the merger, which may impact its financial flexibility in the short term as it reallocates resources following the merger's termination.

Dec 11, 2024 17:18:21

Kroger Extends Exchange Offers for $7.44 Billion in Notes

Kroger has announced an extension of its exchange offers and consent solicitations for Albertsons Companies, Inc. notes, allowing holders until December 13, 2024, to participate. This initiative involves an exchange of up to $7,441,608,000 in notes and aims to adopt proposed amendments to the indentures governing these notes. Notably, the requisite number of consents needed for the amendments related to certain series has already been received, indicating progress in the transaction process leading to the anticipated merger with Albertsons.

However, the extension of the expiration date suggests that there may be challenges in achieving full participation in the exchange offers. The successful completion of these offers is contingent upon the closing of the merger, which is expected to occur in the fourth quarter of 2024. Additionally, the press release emphasizes that the exchange offers are subject to various conditions, which may affect the overall execution of this financial strategy.

Dec 06, 2024 08:39:27

Kroger Reports $33.6 Billion in Third Quarter Sales

Kroger Co. reported total sales of $33.6 billion for the third quarter of 2024, reflecting a decrease from $34.0 billion in the same quarter last year, primarily due to the sale of its specialty pharmacy business and lower fuel sales. However, excluding these factors, sales increased by 2.7%, showcasing growth in their pharmacy and digital sectors. The company also improved its gross margin rate, indicating effective cost management despite the challenging macroeconomic environment. Kroger expressed confidence in its long-term growth strategy and ongoing investments in customer value and associate development.

On the negative side, the sale of the specialty pharmacy business led to a significant reduction in overall sales, with annualized sales projected to be approximately $3 billion lower moving forward. Additionally, the operating, general, and administrative costs increased due to this sale and rising incentive plan costs. The company has paused its share repurchase program to focus on reducing debt related to the proposed merger with Albertsons, although it maintains a strong balance sheet with a net total debt to adjusted EBITDA ratio of 1.21, down from 1.40 a year ago.

Dec 05, 2024 08:07:51