01—Abstract
Summary
Summary of the 8-K filed September 11, 2025. Cited figures are marked; the original filing is the authoritative source.
The Kroger Co. (NYSE: KR) furnished an 8-K on September 11, 2025 announcing its second quarter 2025 results (quarter ended August 16, 2025) and updated full-year 2025 guidance.
Sales were $33.94 billiona versus $33.91 billion a year earlier, and the company reported operating profit of $863 million (versus $815 million) and diluted EPS of $0.91 (versus $0.64). Adjusted FIFO operating profit was $1,091 million (versus $984 million) and adjusted EPS was $1.04 (versus $0.93). Identical sales without fuel rose 3.4%, and gross margin was 22.5% of sales versus 22.1%, helped by the sale of Kroger Specialty Pharmacy, lower supply chain costs and lower shrink.
The filing states that net total debt to adjusted EBITDA was 1.63, compared with 1.24 a year earlier, and that the company's target range is 2.30 to 2.50. Kroger raised its identical sales without fuel guidance to 2.7% to 3.4% from 2.25% to 3.25%, and narrowed operating profit guidance to $4.8 to $4.9 billionb from $4.7 to $4.9 billion. Adjusted EPS guidance moved to $4.70 to $4.80 from $4.60 to $4.80.
Free cash flow guidance of $2.8 to $3.0 billionc and capital expenditure guidance of $3.6 to $3.8 billion were unchanged, and the adjusted tax rate was lowered to 22% from 23%. On capital allocation, the company said it expects to keep generating strong free cash flow, maintain its investment grade debt rating, and continue its quarterly dividend. It noted a $5 billion accelerated share repurchase program expected to finish in fiscal third quarter 2025, after which it plans to resume open market repurchases under the remaining $2.5 billion authorization, to be completed by the end of fiscal 2025.
02—Key points
Key Highlights
- Second quarter sales were $33.94 billion, compared with $33.91 billion a year earlier, and identical sales without fuel increased 3.4%.
- Diluted EPS was $0.91 versus $0.64, and adjusted EPS was $1.04 versus $0.93.
- Adjusted FIFO operating profit was $1,091 million, up from $984 million, and eCommerce sales increased 16%.
- Gross margin rose to 22.5% from 22.1%, primarily due to the sale of Kroger Specialty Pharmacy, lower supply chain costs and lower shrink.
- Full-year identical sales without fuel guidance was raised to 2.7% to 3.4%, and adjusted EPS guidance was narrowed to $4.70 to $4.80.
- Net total debt to adjusted EBITDA rose to 1.63 from 1.24 a year earlier, within a 2.30 to 2.50 target range.
- A $5 billion accelerated share repurchase is expected to complete in fiscal Q3 2025, followed by $2.5 billion of open market repurchases by year-end.
03—Questions
Frequently Asked Questions
How did Kroger perform in the second quarter of 2025?
Sales were $33.94 billion, roughly flat with $33.91 billion a year earlier. Operating profit was $863 million versus $815 million, and diluted EPS was $0.91 versus $0.64. Identical sales without fuel rose 3.4%.
Did Kroger change its 2025 guidance?
Yes. Identical sales without fuel guidance increased to 2.7% to 3.4% from 2.25% to 3.25%. Operating profit guidance narrowed to $4.8 to $4.9 billion from $4.7 to $4.9 billion, and adjusted EPS guidance narrowed to $4.70 to $4.80 from $4.60 to $4.80. Free cash flow and capital expenditure guidance were unchanged, and the adjusted tax rate was lowered to 22% from 23%.
What is Kroger's share repurchase plan?
Kroger entered a $5 billion accelerated share repurchase program in the fourth quarter of fiscal 2024, expected to finish in fiscal third quarter 2025. The company then expects to resume open market repurchases under the remaining $2.5 billion of its $7.5 billion authorization, to be completed by the end of fiscal 2025.
How leveraged is Kroger's balance sheet?
Net total debt to adjusted EBITDA was 1.63 as of August 16, 2025, compared with 1.24 a year earlier. Net total debt was $13.29 billion, up from $9.68 billion. The company's target range is 2.30 to 2.50, and it states it intends to keep its investment grade debt rating.
What drove the improvement in gross margin?
The filing attributes the increase in gross margin to the sale of Kroger Specialty Pharmacy, lower supply chain costs, lower shrink and decreased fuel sales. These gains were partially offset by the mix effect from faster pharmacy sales growth, which carries lower margins, and by price investments.
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