Kroger (KR) Q3 2025 earnings summary

Executive summary

• Q3 2024 delivered strong sales growth in pharmacy, digital, and private label, with identical sales excluding fuel up 2.3% and digital sales up 11%; delivery sales increased 18%.

• Customer engagement and loyalty remained robust, supported by value pricing, personalized offers, and quality private label products.

• Budget-conscious households remain pressured, but mainstream and premium segments are returning to pre-pandemic patterns.

• Sale of Kroger Specialty Pharmacy for $464M reduced sales by ~$340M in Q3 and will lower annualized sales by ~$3B, but improved gross margin.

• The Albertsons merger was terminated in December 2024 following court injunctions; no termination fee is expected.

Financial highlights

• Q3 2024 sales were $33.6B–$33.96B, down 1% year-over-year, mainly due to the pharmacy sale and lower fuel sales.

• Identical sales without fuel grew 2.3% year-over-year; digital sales up 11%; delivery up 18%.

• Adjusted FIFO operating profit was $1.02B; adjusted EPS was $0.98, up 3% year-over-year.

• Gross margin was 22.85%–22.9% of sales; FIFO gross margin rate (ex-fuel) increased 51 bps.

• Net earnings attributable to Kroger were $618M; net earnings per diluted share were $0.84.

Outlook and guidance

• Full-year identical sales without fuel expected at 1.20%–1.50%; adjusted FIFO operating profit at $4.6–$4.7B; adjusted EPS at $4.35–$4.45.

• Adjusted free cash flow expected at $2.5–$2.7B; capital expenditures at $3.6–$3.8B.

• Adjusted effective tax rate forecast at 22.5%.

• Q4 identical sales expected to be strong but sequentially lower than Q3 due to weather-related comps.

• 2025 plan in progress; expect FIFO operating profit growth on a standalone basis.