01—Abstract
Summary
Summary of the 10-K filed March 31, 2026. Cited figures are marked; the original filing is the authoritative source.
The Kroger Co. reported fiscal 2025 (52 weeks ended January 31, 2026) results marked by a $2.5 billiona fulfillment network impairment and related charges.
Sales were $147.64 billionb, up 0.4% from $147.12 billion, and sales without fuel rose 1.4% to $134.06 billion. Operating profit fell to $1.89 billion from $3.85 billion, while adjusted FIFO operating profit increased 4.9% to $4.91 billion. Net earnings attributable to The Kroger Co. were $1.02 billion, or $1.54 per diluted share, down 58.0%.
Excluding adjusted items, net earnings per diluted share were $4.85c, up 8.5%. Identical sales excluding fuel and adjusted items increased 2.9%, and eCommerce sales rose 16%. The company generated $7.31 billion in operating cash flow, returned $4.3 billion to shareholders through share repurchases and dividends, and held $3.33 billion in cash at year-end.
Total debt including finance leases was $17.6 billiond, and the leverage ratio under the credit facility was 1.54 to 1, against a 3.50 to 1 default threshold. The company stated its target of maintaining an investment grade rating and returning to a net total debt to adjusted EBITDA ratio of 2.30 to 2.50. Management expects its value creation model to deliver total shareholder return within a range of 8% to 11% over time.
The filing also notes the company closed certain automated fulfillment facilities in January 2026, and that Gregory S. Foran became Chief Executive Officer in February 2026.
The filing discloses ongoing litigation with Albertsons over the terminated merger, which seeks a $600 million termination fee, and opioid settlement liabilities totaling $132 million current and $981 million long-term at year-end. Additional risk areas include a labor-intensive workforce with more than two-thirds of associates covered by collective bargaining agreements, and multi-employer pension exposure that management estimates at about $1.2 billion net of tax as of December 31, 2025.
02—Key points
Key Highlights
- Sales of $147.64 billion rose 0.4%, and sales without fuel rose 1.4% to $134.06 billion.
- Operating profit fell to $1.89 billion from $3.85 billion, driven by a $2.5 billion fulfillment network impairment and related charges.
- Adjusted FIFO operating profit rose 4.9% to $4.91 billion, and adjusted net earnings per diluted share rose 8.5% to $4.85.
- Identical sales excluding fuel and adjusted items increased 2.9%, with eCommerce sales up 16% led by Delivery.
- Operating cash flow reached $7.31 billion, up from $5.79 billion, and $4.3 billion was returned to shareholders via dividends and buybacks.
- Total debt including finance leases was $17.6 billion, with a leverage ratio of 1.54 to 1 under the credit facility.
- Litigation risk remains from the terminated Albertsons merger, where Albertsons seeks a $600 million termination fee, and from opioid settlement liabilities of $1.11 billion combined at year-end.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2026filed March 31, 2026Financial Statements
FY2026 against FY2025
| Line item | FY2026FY2025 | Change |
|---|---|---|
| Revenue | $147.64B$147.12B | +0.4% |
| Operating Income | $1.89B$3.85B | −50.9% |
| Net Income | $1.02B$2.67B | −61.7% |
| EPS (Basic) | $1.55$3.70 | −58.1% |
| EPS (Diluted) | $1.54$3.67 | −58.0% |
| Shares Outstanding (Basic) | 652.00M715.00M | −8.8% |
| Shares Outstanding (Diluted) | 655.00M720.00M | −9.0% |
05—Questions
Frequently Asked Questions
Why did operating profit decline so sharply in 2025?
Operating profit was $1.89 billion compared with $3.85 billion in 2024, primarily due to $2.5 billion of fulfillment network impairment and related charges tied to closing automated fulfillment facilities in Pleasant Prairie, Wis.; Frederick, Md.; and Groveland, Fla., and canceling a planned site in Charlotte, N.C.
How did underlying profitability trend excluding one-time items?
Excluding the 2025 and 2024 adjusted items, adjusted FIFO operating profit increased 4.9% to $4.91 billion, and adjusted net earnings per diluted share rose 8.5% to $4.85, driven by higher adjusted FIFO operating profit excluding fuel, lower income tax expense and fewer common shares outstanding.
What is the company's capital return and balance sheet position?
Kroger returned $4.3 billion through share repurchases and dividends in 2025. Dividends paid were $1.34 per share. Total debt including finance leases was $17.6 billion, and the leverage ratio was 1.54 to 1, well below the 3.50 to 1 covenant threshold. The Board approved a new $2.0 billion repurchase program in December 2025.
What legal and contingent liabilities should investors watch?
Albertsons seeks a $600 million termination fee and additional damages over the terminated merger, and Kroger has filed counterclaims. Opioid settlement liabilities were $132 million current and $981 million long-term at January 31, 2026. The filing states it cannot reasonably estimate the range of ultimate loss for all remaining opioid-related matters.
06—Continue