01—Abstract
Summary
Summary of the 10-Q filed June 27, 2025. Cited figures are marked; the original filing is the authoritative source.
The Kroger Co. reported first-quarter results for the 16-week period ended May 24, 2025.
Sales were $45.12 billiona, down slightly from $45.27 billion, as lower fuel sales and the sale of Kroger Specialty Pharmacy offset growth in sales without fuel of $40.78 billion, which rose 1.2%. Operating profit was $1,322 million versus $1,294 million, and net earnings attributable to The Kroger Co. were $866 million, compared with $947 million. Net earnings per diluted share were $1.29, flat year over year.
Excluding Adjusted Items, adjusted net earnings per diluted share were $1.49b, a 4.2% increase from $1.43, driven by higher adjusted FIFO operating profit, lower income tax expense and fewer shares outstanding, partly offset by higher net interest expense of $199 million versus $123 million. Identical sales excluding fuel and Adjusted Items rose 3.2%, led by pharmacy, eCommerce and Fresh, and eCommerce sales grew 15%. Management noted an approximately $100 million store closure charge tied to closing about 60 stores over 18 months and an incremental $60 million multi-employer pension contribution.
Cash flow from operations was $2.15 billionc, and cash and temporary cash investments rose to $4.74 billion. Total debt was $17.9 billion, and the company repurchased $181 million of shares during the quarter, with $2.5 billion remaining under its December 2024 repurchase program. The filing also flags legal and operational uncertainties.
Albertsons sued Kroger over a $600 milliond termination fee following the terminated merger, and Kroger has filed counterclaims. The company is conducting a comprehensive review of its eCommerce operations after Ocado drew down the entire $152 million letter of credit in the second quarter of 2025, and the outcome could have a material effect on the financial statements. The filing also notes that the company has an Interim Chief Executive Officer.
02—Key points
Key Highlights
- Sales of $45.12 billion declined 0.3% versus $45.27 billion, reflecting lower supermarket fuel sales and the sale of Kroger Specialty Pharmacy, partially offset by growth in sales without fuel.
- Operating profit rose to $1,322 million from $1,294 million; GAAP net earnings attributable to Kroger fell to $866 million from $947 million.
- Net earnings per diluted share were $1.29, flat year over year; adjusted net earnings per diluted share rose 4.2% to $1.49.
- Identical sales excluding fuel and Adjusted Items increased 3.2%, led by pharmacy, eCommerce and Fresh, and eCommerce sales increased 15%.
- Net interest expense increased to $199 million from $123 million, reflecting debt from the third-quarter 2024 senior notes issuance.
- Cash flow from operations was $2.15 billion, and cash and temporary cash investments increased to $4.74 billion.
- Albertsons is suing for a $600 million termination fee after the Merger Agreement was terminated, and Kroger has filed counterclaims; the eCommerce review with Ocado could have a material effect on financial statements.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed June 27, 2025Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $45.12B$45.27B | −0.3% |
| Operating Income | $1.32B$1.29B | +2.2% |
| Net Income | $868.00M$956.00M | −9.2% |
| EPS (Basic) | $1.30$1.30 | 0.0% |
| EPS (Diluted) | $1.29$1.29 | 0.0% |
| Shares Outstanding (Basic) | 660.00M721.00M | −8.5% |
| Shares Outstanding (Diluted) | 664.00M727.00M | −8.7% |
05—Questions
Frequently Asked Questions
How did Kroger's profitability change in the first quarter of 2025?
Operating profit increased to $1,322 million from $1,294 million, but net earnings attributable to The Kroger Co. declined to $866 million from $947 million, and GAAP diluted EPS was flat at $1.29. Adjusted diluted EPS rose 4.2% to $1.49 after excluding Adjusted Items such as store closure costs, labor dispute charges and an unrealized investment loss.
What drove sales performance in the quarter?
Total sales fell 0.3% to $45.12 billion, mainly due to a 12.5% decline in supermarket fuel sales and the sale of Kroger Specialty Pharmacy. Sales without fuel rose 1.2% to $40.78 billion, and identical sales excluding fuel and Adjusted Items rose 3.2%, led by pharmacy, eCommerce and Fresh.
What are the main one-time charges and costs affecting results?
The company recognized $100 million in store closure costs ($77 million net of tax) for closing about 60 stores over 18 months, and an incremental $60 million ($46 million net of tax) contribution to multi-employer pension plans. It also recorded a $44 million labor dispute charge and $15 million in merger-related litigation costs.
How is Kroger managing its capital and shareholder returns?
Kroger generated $2.15 billion in operating cash flow, paid $211 million in dividends, and repurchased $181 million of shares at an average price of $67.82. The December 2024 repurchase program had $2.5 billion remaining, and total debt was $17.9 billion, with management stating it is committed to maintaining its investment grade rating.
What legal and operational risks does the filing highlight?
Albertsons sued Kroger in the Delaware Court of Chancery seeking a $600 million termination fee after the merger was blocked by a preliminary injunction, and Kroger denies owing the fee and has filed counterclaims. Separately, Kroger's comprehensive review of its eCommerce operations, prompted by Ocado drawing down the entire $152 million letter of credit, could have a material effect on its financial statements.
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