The Kroger Co.
Key statistics
from XBRL data in SEC filingsAI briefing
from the latest 10-K, 10-Q and 8-K eventsKroger is a diversified grocery retailer operating 2,697 supermarkets across 35 states, with pharmacies, fuel centers, and a growing digital and media business.
What they do
Kroger operates supermarkets under local banners, offering groceries, pharmacy, fuel, and eCommerce pickup/delivery. It derives revenue primarily from in-store and online product sales, and also generates high-margin alternative profit from its retail media business, Kroger Precision Marketing. The company uses customer data and traffic to personalize offers and drive loyalty.
Revenue drivers
- Retail grocery sales — Core business: supermarkets in 35 states, 2,697 stores; sales without fuel were $134.1B in fiscal 2025, up 1.4% from prior year.
- Fuel centers — 1,731 stores with fuel centers; fuel sales are a notable revenue and loyalty component, though margins are volatile and mix impacts gross margin.
- Pharmacy and health/wellness — 2,250 stores with pharmacies; pharmacy sales were a growth driver in 2025 and favorable mix helped offset other margin pressures.
- eCommerce and Kroger Precision Marketing — eCommerce includes pickup (at 2,408 stores) and delivery; adjusted eCommerce sales grew 19% in Q1 2026, and Kroger Precision Marketing profit grew over 20%.
Recent performance
Q1 2026 (ended May 23, 2026) sales were $46.1B, up from $45.1B a year ago; identical sales without fuel rose 1.0% (excluding 130bps impact from the Inflation Reduction Act). Operating profit was $1.407B, adjusted FIFO operating profit $1.544B, EPS $1.46, adjusted EPS $1.58. Fiscal 2025 revenue was $147.6B, net income $1.02B, EPS $1.54, operating cash flow $7.3B.
Strategy
Management's stated priorities: grow households and loyalty through Fresh, Our Brands, Personalization, and eCommerce. They plan to accelerate new store investment and major store projects, expand eCommerce (targeting double-digit growth), and grow the alternative profit business (retail media). They aim to simplify operations and improve cost structure to reinvest in pricing and associates, while maintaining an investment-grade rating and returning cash via dividends and buybacks.
Risks
- Intense competition — Competition from online, mass, club, discount, and specialty retailers; failure to adapt could hurt sales and margins.
- Labor and wage pressures — Planned wage/hours investments raised OG&A rate by 16bps in Q1 2026; labor negotiations or work stoppages could impact operations.
- Inflation and price investments — Food deflation, transportation costs, and price investments pressured gross margin; continued volatility could weigh on profitability.
- Macro and geopolitical — Tariffs, economic uncertainty, fuel cost volatility, and consumer caution can affect spending and operating costs.
Outlook
Management reaffirmed FY2026 guidance: identical sales without fuel growth of 1.0%–2.0%, FIFO operating profit of $5.0–$5.2B, EPS of $5.10–$5.30, free cash flow of $2.7–$2.9B, capex of $3.8B. They expect to complete the additional $2B share repurchase authorization by end of fiscal 2026 and maintain net total debt to adjusted EBITDA well below the 2.30–2.50 target range (currently 1.75). They target 8%–11% total shareholder return over time.