Kroger (KR) Q4 2025 earnings summary

Executive summary

• Fourth quarter identical sales without fuel grew 2.4% year-over-year; full-year growth was 1.5%.

• Digital sales rose 11% in Q4 and 10% for the year, surpassing $13B annually.

• Adjusted FIFO operating profit was $1.17B for Q4 and $4.7B for the year.

• Adjusted EPS was $1.14 for Q4 (flat year-over-year) and $4.47 for the year (down 2%).

• Launched $5B accelerated share repurchase program under $7.5B authorization.

Financial highlights

• Q4 sales were $34.3B, down from $37.1B last year due to the prior year’s 53rd week and pharmacy sale; sales up 2.6% excluding these.

• Full-year sales were $147.1B, down from $150.0B.

• Q4 gross margin improved to 22.7% from 22.3% year-over-year; full-year gross margin rose to 22.3% from 21.8%.

• Q4 net income attributable to Kroger was $634M; full-year net income was $2.67B.

• Adjusted free cash flow for the year was $2.5B, down from $3.2B in 2023.

Outlook and guidance

• 2025 guidance: identical sales without fuel growth of 2%-3%, adjusted FIFO operating profit of $4.7B-$4.9B, and adjusted EPS of $4.60-$4.80.

• Free cash flow expected at $2.8B–$3.0B; capital expenditures of $3.6B–$3.8B; tax rate of 23%.

• LIFO charge expected to be ~$130M in 2025; inflation forecasted at 1.5%-2.5%.

• Quarterly cadence: Q1 EPS similar to last year, Q2-Q4 above prior year.