01—Abstract
Summary
Summary of the 8-K filed March 6, 2025. Cited figures are marked; the original filing is the authoritative source.
The Kroger Co. (NYSE: KR) reported fourth quarter and fiscal 2024 results on March 6, 2025, and issued 2025 guidance, as furnished in Exhibit 99.1 press release.
For the fourth quarter, sales were $34.3 billiona versus $37.1 billion a year earlier (which included $2.7 billion from the 53rd week in 2023 and $737 million of Kroger Specialty Pharmacy sales), operating profit was $912 million, diluted EPS was $0.90, and adjusted EPS was $1.14. Identical sales without fuel increased 2.4%. For fiscal 2024, sales were $147.1 billion, operating profit was $3.8 billion, diluted EPS was $3.67, and adjusted FIFO operating profit was $4.7 billion.
Identical sales without fuel rose 1.5%, and the company noted Ron Sargent as interim CEO. Capital allocation remained a central theme. Kroger initially repurchased 65.6 million shares in the quarter under a $5.0 billionb accelerated share repurchase program, expected to finish no later than the third fiscal quarter of 2025, within a $7.5 billion authorization.
The company has $2.5 billionc of remaining capacity under that authorization. Net total debt to adjusted EBITDA was 1.79 on a 52-week basis, compared with 1.33 a year earlier, against a target range of 2.30 to 2.50.
Long-term debt rose to $17.7 billiond from $12.0 billion. For 2025, Kroger guided to identical sales without fuel of 2.0% to 3.0%, adjusted FIFO operating profit of $4.7 to $4.9 billion, adjusted diluted EPS of $4.60 to $4.80, adjusted free cash flow of $2.8 to $3.0 billion, and capital expenditures of $3.6 to $3.8 billion, with net interest expense expected between $650 and $675 million.
02—Key points
Key Highlights
- Q4 2024 operating profit was $912 million and diluted EPS was $0.90, versus $1,194 million and $1.01 in Q4 2023; adjusted EPS was $1.14.
- Fiscal 2024 sales were $147.1 billion, operating profit was $3.8 billion, and diluted EPS was $3.67; adjusted EPS was $4.47.
- Identical sales without fuel increased 2.4% in Q4 2024 and 1.5% for fiscal 2024.
- Kroger initially repurchased 65.6 million shares under a $5.0 billion accelerated share repurchase program, with $2.5 billion of remaining authorization capacity.
- Net total debt to adjusted EBITDA rose to 1.79 from 1.33, still below the 2.30 to 2.50 target range; long-term debt increased to $17.7 billion from $12.0 billion.
- 2025 guidance calls for identical sales without fuel of 2.0% to 3.0%, adjusted FIFO operating profit of $4.7 to $4.9 billion, and adjusted EPS of $4.60 to $4.80.
- Ron Sargent is serving as interim CEO and Todd Foley as interim CFO, per the press release.
03—Questions
Frequently Asked Questions
How did Kroger perform in the fourth quarter of 2024?
Sales were $34.3 billion versus $37.1 billion a year earlier, which included $2.7 billion from the 53rd week in 2023. Identical sales without fuel rose 2.4%, operating profit was $912 million, diluted EPS was $0.90, and adjusted EPS was $1.14.
What is Kroger's 2025 outlook?
Kroger guided to identical sales without fuel of 2.0% to 3.0%, adjusted FIFO operating profit of $4.7 to $4.9 billion, adjusted diluted EPS of $4.60 to $4.80, adjusted free cash flow of $2.8 to $3.0 billion, and capital expenditures of $3.6 to $3.8 billion.
How is Kroger returning capital to shareholders?
Kroger is executing a $5.0 billion accelerated share repurchase program, with 65.6 million shares initially repurchased in the quarter, expected to complete by no later than the third fiscal quarter of 2025. The company has $2.5 billion of remaining capacity under its $7.5 billion authorization and expects to continue paying and increasing its quarterly dividend, subject to board approval.
Has Kroger's leverage changed?
Yes. Net total debt to adjusted EBITDA was 1.79 on a 52-week basis, up from 1.33 a year earlier. Net total debt rose to $14.2 billion from $10.6 billion, and the company's target range is 2.30 to 2.50.
What drove margin changes in the quarter?
Gross margin rose to 22.7% from 22.3%, mainly due to the sale of Kroger Specialty Pharmacy and lower shrink, partially offset by lower pharmacy margins and the LIFO charge. The FIFO gross margin rate increased 54 basis points excluding the 53rd week and rent, depreciation, and amortization.
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