The Kroger Co (KR) Q1 2027 earnings summary

Executive summary

• Identical sales excluding fuel increased 1.0% year-over-year, with total sales reaching $46.1 billion, up from $45.1 billion, driven by eCommerce, fresh, and Our Brands.

• Adjusted EPS was $1.58, up 6% year-over-year, and adjusted FIFO operating profit reached $1,544 million, up from $1,518 million.

• eCommerce sales grew 19% year-over-year, reaching profitability for the first time, and Kroger Precision Marketing profit increased over 20%.

• Net earnings attributable to shareholders rose to $903 million, up from $866 million, with GAAP EPS at $1.46.

• Cost savings initiatives delivered results ahead of plan, supporting price investments and margin performance.

Financial highlights

• Total sales were $46,121 million, up from $45,118 million year-over-year.

• Gross margin was 22.7%, down from 23.0%, mainly due to higher fuel sales, transportation costs, and egg deflation.

• Adjusted FIFO operating profit was $1,544 million, up from $1,518 million; operating profit rose to $1,407 million from $1,322 million.

• OG&A expenses as a percentage of sales decreased to 17.3% from 17.6%, aided by cost savings and higher fuel sales.

• Net total debt to adjusted EBITDA was 1.75x, below the target range of 2.3x–2.5x.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: identical sales without fuel expected to grow 1.0%–2.0%, with adjusted EPS guidance of $5.10–$5.30.

• FIFO operating profit projected at $5.0–$5.2 billion; free cash flow expected at $2.7–$2.9 billion, with capital expenditures of $3.8–$4.0 billion.

• Tax rate expected at 23% for the year.

• Management remains committed to dividend growth and ongoing share repurchases, with a $2 billion buyback authorized.

• Growth expected to accelerate in the second half as cost initiatives ramp and digital businesses expand.