01—Abstract
Summary
Summary of the 8-K filed June 20, 2025. Cited figures are marked; the original filing is the authoritative source.
The Kroger Co. (NYSE: KR) furnished an 8-K on June 20, 2025 reporting first quarter 2025 results (quarter ended May 24, 2025).
Sales were $45.1 billiona versus $45.3 billion a year earlier, which included $917 million from Kroger Specialty Pharmacy sales. Operating profit was $1,322 million compared with $1,294 million, and diluted EPS was $1.29, flat year over year. Adjusted FIFO operating profit rose to $1,518 million from $1,499 million, and adjusted EPS was $1.49 versus $1.43.
Identical sales without fuel increased 3.2%, and eCommerce sales increased 15%. Gross margin improved to 23.0% from 22.0%, driven primarily by the sale of Kroger Specialty Pharmacy, lower shrink and lower supply chain costs. The company recorded a $100 millionb impairment charge tied to the planned closing of approximately 60 stores over the next 18 months, which management says will not affect full-year guidance.
Net total debt to adjusted EBITDA was 1.69, up from 1.25 a year earlier, and remains below the company's stated target range of 2.30 to 2.50. Kroger reiterated its $5 billionc accelerated share repurchase program, expected to complete by fiscal third quarter 2025, followed by resumed open market repurchases under the remaining $2.5 billion authorization. Full-year 2025 guidance was mostly reaffirmed, with one update: identical sales without fuel were raised to 2.25% to 3.25%.
Adjusted FIFO operating profit ($4.7 to $4.9 billiond), adjusted EPS ($4.60 to $4.80), adjusted free cash flow ($2.8 to $3.0 billion) and capital expenditures ($3.6 to $3.8 billion) were unchanged. The CFO noted that the macroeconomic environment remains uncertain.
02—Key points
Key Highlights
- Sales of $45.1 billion, versus $45.3 billion a year earlier, which included $917 million from Kroger Specialty Pharmacy.
- Identical sales without fuel increased 3.2%; eCommerce sales increased 15%.
- Diluted EPS of $1.29 (flat year over year); adjusted EPS of $1.49 versus $1.43.
- Gross margin of 23.0% versus 22.0%, aided by the sale of Kroger Specialty Pharmacy, lower shrink and lower supply chain costs.
- $100 million impairment charge tied to the planned closing of about 60 stores over 18 months; management says this will not affect full-year guidance.
- Net total debt to adjusted EBITDA of 1.69 versus 1.25 a year ago, within the stated target range of 2.30 to 2.50 (note: 1.69 is below the range).
- Full-year 2025 identical sales without fuel guidance raised to 2.25% to 3.25%; other guidance items reaffirmed.
03—Questions
Frequently Asked Questions
How did Kroger perform in the first quarter of 2025?
Sales were $45.1 billion versus $45.3 billion a year earlier. Operating profit rose to $1,322 million from $1,294 million, diluted EPS was flat at $1.29, and adjusted EPS rose to $1.49 from $1.43. Identical sales without fuel increased 3.2%.
Did Kroger change its 2025 guidance?
Only identical sales without fuel guidance was updated, to 2.25% to 3.25%. Adjusted FIFO operating profit ($4.7 to $4.9 billion), adjusted EPS ($4.60 to $4.80), adjusted free cash flow ($2.8 to $3.0 billion), capital expenditures ($3.6 to $3.8 billion) and the adjusted tax rate of 23% were reaffirmed.
Why did gross margin improve?
Gross margin rose to 23.0% from 22.0%, primarily due to the sale of Kroger Specialty Pharmacy, lower shrink and lower supply chain costs, partially offset by the mix effect of growing lower-margin pharmacy sales.
What is the status of Kroger's share repurchases?
Kroger's $5 billion accelerated share repurchase program, entered in the fourth quarter of fiscal 2024, is expected to be completed by no later than fiscal third quarter 2025. Afterward, the company expects to resume open market repurchases under the remaining $2.5 billion of its $7.5 billion authorization, completing them by the end of fiscal 2025.
What store closures were announced and what is their financial impact?
The company recorded a $100 million impairment charge related to the planned closing of approximately 60 stores over the next 18 months. Kroger expects a modest financial benefit but plans to reinvest those savings into the customer experience, so the company said it will not affect full-year guidance. Affected associates will be offered roles in other stores.
04—Continue