Kroger (NYSE:KR) Announces Earnings Results, Beats Estimates By $0.08 EPS

Key Points

• Kroger beat Q4 estimates with adjusted EPS of $1.28 vs. a $1.20 consensus and revenue of $34.73B (slightly below estimates), and updated FY2026 guidance to $5.10–$5.30 EPS.
• E‑commerce acceleration and leadership change: e‑commerce sales grew ~20% to a $16B business with management targeting e‑commerce profitability by 2026 via a hybrid store fulfillment model and third‑party partners, while new CEO Greg Foran prioritizes price, fresh execution, AI and faster omnichannel execution.
• Capital returns vs. near‑term headwinds: Kroger completed a $7.5B repurchase (plus a $2B authorization) but flagged risks including a $157M LIFO charge, store closures and legal/labor exposure, and guided 2026 adjusted free cash flow down to $2.7–$2.9B.

Kroger (NYSE:KR - Get Free Report) released its earnings results on Thursday. The company reported $1.28 EPS for the quarter, beating the consensus estimate of $1.20 by $0.08, FiscalAI reports. Kroger had a net margin of 0.54% and a return on equity of 38.06%. The firm had revenue of $34.73 billion for the quarter, compared to analysts' expectations of $35.10 billion. During the same quarter last year, the company earned $1.14 EPS. Kroger's quarterly revenue was up 1.2% on a year-over-year basis. Kroger updated its FY 2026 guidance to 5.100-5.300 EPS.

Here are the key takeaways from Kroger's conference call:

• Leadership change: Greg Foran is the new CEO and plans to accelerate top‑line growth by focusing on price, fresh execution, e‑commerce, AI and faster operational execution across stores and digital channels.
• E‑commerce acceleration and profitability target: Adjusted e‑commerce grew 20% in Q4 to a $16 billion business, and Kroger expects e‑commerce to reach profitability in 2026 driven by a hybrid store‑based fulfillment model and third‑party partners (Instacart, DoorDash, Uber Eats).
• Solid near‑term results: Q4 identical sales without fuel rose 2.4% (FY +2.9%), Q4 adjusted EPS was $1.28 (+12%) and full‑year adjusted EPS was $4.85 (+9%), with positive market share gains in the final period.
• 2026 guidance and investments: Kroger guided identical sales without fuel of 1–2% (2.3–3.3% ex‑IRA), adjusted FIFO operating profit of $5.0–$5.2B and adj. EPS $5.10–$5.30 while planning bigger price and service investments funded by targeted cost savings in procurement and e‑commerce and higher store openings.
• Cost actions and cash‑flow/headwinds: Management is selling Vitacost and closing ~50 Little Clinic sites, reported a $157M LIFO charge ($0.07 EPS headwind), and guided 2026 adjusted free cash flow down to $2.7–$2.9B despite strong 2025 cash generation, which could pressure near‑term liquidity and execution risk.

Kroger Trading Up 2.0%

Shares of NYSE:KR traded up $1.38 during mid-day trading on Thursday, hitting $69.37. The stock had a trading volume of 3,394,408 shares, compared to its average volume of 6,675,490. The company's 50 day moving average is $64.96 and its 200-day moving average is $65.85. Kroger has a 12-month low of $58.60 and a 12-month high of $74.90. The company has a debt-to-equity ratio of 2.28, a quick ratio of 0.45 and a current ratio of 0.88. The company has a market cap of $43.90 billion, a PE ratio of 64.23, a P/E/G ratio of 1.74 and a beta of 0.62.

Kroger Dividend Announcement

The company also recently declared a quarterly dividend, which was paid on Sunday, March 1st. Stockholders of record on Friday, February 13th were issued a dividend of $0.35 per share. The ex-dividend date was Friday, February 13th. This represents a $1.40 dividend on an annualized basis and a dividend yield of 2.0%. Kroger's payout ratio is currently 129.63%.

Analysts Set New Price Targets

A number of research analysts recently commented on the stock. Weiss Ratings reiterated a "hold (c)" rating on shares of Kroger in a research note on Monday, December 29th. Telsey Advisory Group restated an "outperform" rating and issued a $80.00 price objective on shares of Kroger in a report on Monday, February 9th. Guggenheim reaffirmed a "buy" rating and set a $78.00 target price on shares of Kroger in a research note on Tuesday, February 10th. Wells Fargo & Company cut shares of Kroger from an "overweight" rating to an "equal weight" rating and dropped their price target for the stock from $70.00 to $68.00 in a research report on Wednesday, February 25th. Finally, Wall Street Zen lowered shares of Kroger from a "buy" rating to a "hold" rating in a research report on Saturday, December 27th. Seven equities research analysts have rated the stock with a Buy rating and eight have assigned a Hold rating to the stock. According to MarketBeat, the stock presently has a consensus rating of "Hold" and a consensus target price of $73.93.

Institutional Trading of Kroger

Several hedge funds and other institutional investors have recently modified their holdings of the business. Worldquant Millennium Advisors LLC lifted its stake in Kroger by 299.6% in the 2nd quarter. Worldquant Millennium Advisors LLC now owns 2,420,495 shares of the company's stock worth $173,622,000 after acquiring an additional 1,814,721 shares in the last quarter. Alyeska Investment Group L.P. lifted its position in shares of Kroger by 48.6% in the fourth quarter. Alyeska Investment Group L.P. now owns 4,445,479 shares of the company's stock worth $277,754,000 after purchasing an additional 1,453,966 shares in the last quarter. GQG Partners LLC boosted its holdings in shares of Kroger by 11.3% during the fourth quarter. GQG Partners LLC now owns 13,398,072 shares of the company's stock worth $837,113,000 after purchasing an additional 1,360,946 shares during the period. Raymond James Financial Inc. grew its position in Kroger by 95.6% during the second quarter. Raymond James Financial Inc. now owns 2,434,663 shares of the company's stock valued at $174,638,000 after purchasing an additional 1,190,127 shares in the last quarter. Finally, AQR Capital Management LLC increased its stake in Kroger by 49.3% in the 4th quarter. AQR Capital Management LLC now owns 3,593,860 shares of the company's stock valued at $224,544,000 after buying an additional 1,186,757 shares during the period. Institutional investors and hedge funds own 80.93% of the company's stock.

Key Kroger News

Here are the key news stories impacting Kroger this week:

• Positive Sentiment: Q4 beat and eCommerce growth — Kroger reported adjusted Q4 EPS of $1.28, topping estimates, and said eCommerce sales rose ~20%, showing strength in higher-margin channels that support future profit expansion. Earnings snapshot: Kroger beats Q4
• Positive Sentiment: FY26 guidance raised above Street — Kroger set FY26 EPS guidance of $5.10–$5.30 versus a ~$5.00 consensus, signaling management expects mid-single-digit EPS growth and giving a clearer earnings path. Kroger Reports Fourth Quarter and Full-Year 2025 Results
• Positive Sentiment: Shareholder returns and buyback acceleration — Kroger completed a $7.5B repurchase program (including a $5B accelerated buyback) and approved an additional $2B authorization, which supports EPS and signals capital-return priority. PR Newswire: Results and Guidance
• Positive Sentiment: eCommerce profitability plan — Management completed an eCommerce strategic review and expects ~$400M of operating profit improvement in 2026 and a path to eCommerce profitability, reducing a prior major drag on margins. PR Newswire: eCommerce review
• Neutral Sentiment: Top-line and margin context — Identical sales (ex-fuel) rose 2.4% in Q4 and FY25 adjusted results show operating profit recovery after prior charges; growth is positive but modest vs. investor expectations for a bigger rebound. Kroger in charts: Identical sales up 2.4%
• Neutral Sentiment: Leadership and strategic moves — Greg Foran named CEO and Kroger is expanding private-label and automation initiatives (drones for inventory), which are strategic positives but will take time to convert to material earnings. PR Newswire: CEO appointment and strategy
• Negative Sentiment: Legal and labor risks — Kroger faces class-action suits over e-commerce worker classification and heightened union conflict (Teamsters accusations), which could raise future labor costs or settlement risk. Grocery Dive: eCommerce lawsuits
• Negative Sentiment: Operational disruption and recalls — Store closures/layoffs and expansion of food recalls (including frozen items tied to Kroger/Trader Joe’s supply chains) add near-term cost and reputational risk. TheStreet: store closures
• Negative Sentiment: Investor reaction & valuation — Despite beats and buybacks, KR shares dipped as investors weighed a cautious tone on growth, prior one-time impairments ($2.5B) that hit GAAP results, and a rich P/E that leaves little room for disappointment. Blockonomi: stock dips despite results

About Kroger

The Kroger Co NYSE: KR is one of the largest supermarket operators in the United States, offering a wide range of retail grocery and related services. Founded in Cincinnati in 1883 by Bernard Kroger, the company operates a portfolio of supermarket and multi-department store banners and provides customers with fresh foods, packaged groceries, deli and bakery items, meat and seafood, produce, and prepared foods. Kroger's stores commonly include pharmacy services and fuel centers, positioning the company as a broad-based neighborhood retail destination for everyday needs.

In addition to traditional in-store retailing, Kroger manufactures and distributes a variety of private-label brands and operates its own food production and supply-chain facilities.

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