Kroger (KR) Q2 2026 earnings summary

Executive summary

• Q2 2025 delivered strong results with 3.4% identical sales growth (ex-fuel), 16% eCommerce growth, and robust performance in pharmacy and fresh categories.

• Operating profit reached $863 million, adjusted FIFO operating profit was $1.1 billion, and adjusted EPS grew 12% to $1.04.

• Store execution, value offerings, and cost optimization—including 60 store closures and 1,000 staff reductions—supported household growth and profitability.

• Leadership team was strengthened, and legal settlements, including with C&S Wholesale Grocers and Albertsons merger termination, were resolved.

• E-commerce, pharmacy, and private label brands outperformed, with retail media and alternative profit streams accelerating.

Financial highlights

• Q2 2025 sales were $33.94 billion, nearly flat year-over-year; net income attributable to shareholders was $609 million, up from $466 million in Q2 2024.

• Gross margin improved to 22.5% from 22.1% year-over-year, driven by the sale of Kroger Specialty Pharmacy and lower supply chain costs.

• Adjusted EBITDA for the rolling four quarters was $8.14 billion, with a net total debt to adjusted EBITDA ratio of 1.63.

• LIFO charge increased to $62 million from $21 million in Q2 2024.

• Cash flow from operations was $3.7 billion YTD, up 6%.

Outlook and guidance

• FY25 identical sales guidance (ex-fuel) raised to 2.7%-3.4%; adjusted EPS guidance increased to $4.70-$4.80, and adjusted FIFO operating profit to $4.8-$4.9 billion.

• Free cash flow guidance maintained at $2.8-$3.0 billion; capex expected at $3.6-$3.8 billion.

• Adjusted tax rate for FY25 revised to 22%.

• Q3 identical sales (ex-fuel) expected slightly below full-year midpoint; full-year FIFO gross margin rate expected to be relatively flat.