Kroger Reports Second Quarter 2025 Results and Updates Guidance for 2025

The Kroger Co. has released its second quarter 2025 results, showcasing a solid performance and providing updated guidance for the full year. The company has demonstrated resilience and growth in several key areas, reflecting its strategic initiatives and operational efficiencies.

Financial Highlights

For the second quarter of 2025, Kroger reported:

• Identical sales without fuel increased by 3.4% compared to the same period last year.
• Operating profit stood at $863 million, with earnings per share (EPS) of $0.91.
• Adjusted FIFO operating profit was $1,091 million, and adjusted EPS was $1.04.
• eCommerce sales saw a significant increase of 16%.

Total company sales were $33.9 billion, consistent with the same period last year. Excluding fuel and Kroger Specialty Pharmacy, sales increased by 3.8% year-over-year. The gross margin improved to 22.5% from 22.1% in the previous year, primarily due to the sale of Kroger Specialty Pharmacy, lower supply chain costs, and reduced shrink.

Business and Operational Highlights

Kroger's operational performance was bolstered by strong sales growth in pharmacy, eCommerce, and fresh categories. The company also benefited from improved productivity and a favorable comparison to the prior year, which included certain non-recurring charges.

Strategic Initiatives and Corporate Developments

During the fourth quarter of fiscal 2024, Kroger initiated a $5 billion accelerated share repurchase program (ASR), expected to be completed in the third quarter of fiscal 2025. This ASR is part of Kroger's $7.5 billion share repurchase authorization. Following the completion of the ASR, Kroger plans to resume open market share repurchases under the remaining $2.5 billion authorization, aiming to complete these by the end of fiscal 2025.

Kroger's net total debt to adjusted EBITDA ratio is currently 1.63, compared to 1.24 a year ago, with a target range of 2.30 to 2.50. The company remains committed to generating strong free cash flow, investing in the business, and maintaining its investment-grade debt rating.

Management's Perspective

Chairman and CEO Ron Sargent commented, "Kroger delivered another quarter of strong results, demonstrating clear and measurable progress on our priorities to simplify our organization, improve the customer experience, and focus on work that creates the most value."

CFO David Kennerley added, "Kroger's second quarter results reflect continued momentum in our business. Sales growth has been strong, led by pharmacy, eCommerce, and Fresh, and we are encouraged by the improvement in grocery volumes. As a result, we are raising our identical sales without fuel guidance to a new range of 2.7% to 3.4%."

Future Outlook

For the full year 2025, Kroger has updated its guidance as follows:

• Identical sales without fuel are expected to grow between 2.7% and 3.4%.
• Operating profit is projected to be in the range of $4.8 to $4.9 billion.
• EPS is forecasted to be between $4.70 and $4.80.
• Free cash flow is anticipated to be between $2.8 and $3.0 billion.
• Capital expenditures are expected to range from $3.6 to $3.8 billion.
• The adjusted tax rate is projected to be around 22%.

SEC Filing: KROGER CO [ KR ] - 8-K - Sep. 11, 2025