The Kroger Co (KR) investor relations material

Executive summary

• Identical sales without fuel grew 0.2% year-over-year, with total sales reaching $34.6 billion, driven by strong eCommerce and fuel sales, but basket size declined due to disciplined consumer spending and external headwinds.

• Adjusted eCommerce sales grew 20% and retail media/marketing profit rose 24%, contributing to a second consecutive quarter of profitable eCommerce growth.

• Adjusted EPS was $1.09, up 5% year-over-year, and adjusted FIFO operating profit reached $1.1 billion.

• The company maintained market share gains versus traditional grocery competitors and outperformed in pharmacy and fuel segments.

• Announced a $1.65 billion acquisition of Giant Eagle, expected to close in 2027, to expand geographic reach.

Financial highlights

• Identical sales excluding fuel increased 0.2% in Q2 and 0.6% for the first two quarters year-over-year.

• Adjusted FIFO operating profit was $1.08 billion, and operating profit rose 12.5% to $971 million.

• Gross margin was 22.4%, slightly down from 22.5% last year, with OG&A expenses as a percentage of sales decreasing to 17.2%.

• Net earnings attributable to shareholders were $641 million, with EPS of $1.05.

• Dividend per share for Q2 was $0.39, up from $0.35 in Q2 2025.

Outlook and guidance

• Full-year identical sales without fuel guidance lowered to 0.2%-0.8% from 1%-2%, reflecting a 140 basis point headwind from the Inflation Reduction Act.

• Full-year adjusted FIFO operating profit guidance maintained at $5.0-$5.2 billion; adjusted EPS guidance held at $5.10-$5.30.

• Free cash flow expected at $2.7-$2.9 billion; capital expenditures at $3.8-$4.0 billion.

• Management remains committed to dividend growth and ongoing share repurchases.

• Tax rate guidance is 23%.