Identical Sales without fuel increased 2.6%
Operating Loss of $(1,541) million; EPS of $(2.02)
Includes $2.6 billion in previously announced impairment and related charges ($3.00 loss per share) for automated fulfillment network
Adjusted FIFO Operating Profit of $1,089 million and Adjusted EPS of $1.05
eCommerce sales increased 17%
CINCINNATI, Dec. 4, 2025 /PRNewswire/ -- The Kroger Co. (NYSE:KR) today reported its third quarter 2025 results, updated guidance, and shared progress on key priorities.
Comments from Chairman and CEO Ron Sargent
"Kroger delivered another quarter of strong results reflecting meaningful progress on our strategic priorities. Our eCommerce business posted another quarter of impressive performance. We have now completed our strategic review which we expect will make our eCommerce business profitable in 2026.
We continue to focus on what matters most, serving our customers, running great stores, and strengthening our core business. Our results show we are improving the customer experience and building a strong foundation for long-term growth."
Third Quarter Financial Results
3Q25
($ in millions; except EPS)
3Q24
($ in millions; except EPS)
ID Sales(1) (Table 4)
2.6 %
2.3 %
Earnings (Loss) Per Share(2)
$(2.02)
$0.84
Adjusted EPS (Table 6)
$1.05
$0.98
Operating (Loss) Profit(2)
$(1,541)
$828
Adjusted FIFO Operating Profit (Table 7)
$1,089
$1,017
Gross Margin (Table 8)
22.8 %
22.4 %
FIFO Gross Margin Rate(3)
Increased 49 basis points
(including 25 basis points increase from
the sale of Kroger Specialty Pharmacy)
OG&A Rate(1)
Increased 27 basis points
(including 18 basis points increase from
the sale of Kroger Specialty Pharmacy)
(1) Without fuel and adjustment items, if applicable.
(2) Includes $2.6 billion in previously announced impairment and related charges ($3.00 loss per share) for automated fulfillment network
(3) Without rent, depreciation and amortization, fuel and adjustment items, if applicable.
Total company sales were $33.9 billion in the third quarter compared to $33.6 billion for the same period last year, which included $387 million from Kroger Specialty Pharmacy sales. Excluding fuel and Kroger Specialty Pharmacy, sales increased 2.6% compared to the same period last year.
Gross margin was 22.8% of sales for the third quarter compared to 22.4% for the same period last year. The improvement in gross margin was primarily attributable to the sale of Kroger Specialty Pharmacy, Our Brands performance, lower supply chain costs, and lower shrink, partially offset by the mix effect from growth in pharmacy sales, which has lower margins, and price investments.
The FIFO gross margin rate, excluding rent, depreciation and amortization, and fuel, increased 49 basis points compared to the same period last year. The improvement in rate was primarily attributable to the sale of Kroger Specialty Pharmacy, Our Brands performance, lower supply chain costs, and lower shrink, partially offset by the mix effect from growth in pharmacy sales, which has lower margins, and price investments.
The LIFO charge for the quarter was $44 million, compared to a LIFO charge of $4 million for the same period last year.
The Operating, General and Administrative rate, excluding fuel and adjustment items, increased 27 basis points compared to the same period last year. The increase in rate was primarily attributable to the sale of Kroger Specialty Pharmacy and investments in associate wages and benefits, partially offset by lower incentive plan costs and improved productivity.
Kroger made the decision to make an accelerated contribution to multi-employer pension plans in the third quarter, helping stabilize associates' future benefits and reduce future obligations. The contribution increased this quarter's Operating, General and Administrative rate, excluding fuel and adjustment items, by 8 basis points.
Capital Allocation Strategy
Kroger expects to continue to generate strong free cash flow and remains committed to investing in the business to drive long-term sustainable net earnings growth, as well as maintaining its current investment grade debt rating. The Company expects to continue to pay its quarterly dividend and expects this to increase over time, subject to board approval.
During the fourth quarter of Kroger's fiscal 2024, Kroger entered into a $5 billion accelerated share repurchase program which was completed in Kroger's fiscal third quarter 2025. The ASR was completed as part of Kroger's $7.5 billion share repurchase authorization. Kroger is executing open market share repurchases under the remaining $2.5 billion authorization. Kroger expects to complete these open market share repurchases by the end of fiscal 2025, which is contemplated in full-year guidance.
Kroger's net total debt to adjusted EBITDA ratio is 1.73, compared to 1.21 a year ago (Table 5). The company's net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50. Kroger's strong balance sheet provides ample opportunities for the Company to invest in the business and enhance shareholder value.
Full-Year 2025 Guidance*
Adjusted Metric*
FY25 Guidance as of September 11, 2025
FY25 Guidance as ofDecember 4, 2025
Identical Sales without fuel
2.7% - 3.4%
2.8% - 3.0%
Operating Profit
$4.8 - $4.9 billion
$4.8 - $4.9 billion
EPS
$4.70 - $4.80
$4.75 - $4.80
Free Cash Flow
$2.8 - $3.0 billion
$2.8 - $3.0 billion
Cap Ex
$3.6 - $3.8 billion
$3.6 - $3.8 billion
Tax Rate**
22 %
22 %
* Without adjusted items, if applicable. Kroger is unable to provide a full reconciliation of the GAAP and non-GAAP measures used in 2025 guidance without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant impact on 2025 GAAP financial results.
** The adjusted tax rate reflects typical tax adjustments and does not reflect changes to the rate from the completion of income tax audit examinations and changes in tax laws and policies, which cannot be predicted.
Comments from CFO David Kennerley
"We are pleased with the continued momentum in our business, with particularly strong performance from eCommerce and pharmacy. Given our year-to-date results and outlook for the remainder of the year, we are narrowing our identical sales without fuel guidance to a new range of 2.8% to 3.0% and raising the lower end of our adjusted earnings per share guidance to a new range of $4.75 to $4.80."
About Kroger
At The Kroger Co. (NYSE:KR), we are, across our family of companies more than 400,000 associates who serve over 11 million customers daily through an eCommerce and store experience under a variety of banner names, serving America through food inspiration and uplift, and creating #ZeroHungerZeroWaste communities. To learn more about us, visit our newsroom and investor relations site.
Kroger's third quarter 2025 ended on November 8, 2025.
Note: Fuel sales have historically had a low gross margin rate and operating expense rate as compared to corresponding rates on non-fuel sales. As a result, Kroger discusses the changes in these rates excluding the effect of fuel.
Please refer to the supplemental information presented in the tables for reconciliations of the non-GAAP financial measures used in this press release to the most comparable GAAP financial measure and related disclosure. As noted above, Kroger is unable to provide a full reconciliation of the GAAP and non-GAAP measures used in its guidance without unreasonable effort because it is not possible to predict certain of our adjustment items with a reasonable degree of certainty. This information is dependent upon future events and may be outside of our control and its unavailability could have a significant impact on GAAP financial results.
This press release contains certain statements that constitute "forward-looking statements" about Kroger's financial position and the future performance of the company. These statements are based on management's assumptions and beliefs in light of the information currently available to it. Such statements are indicated by words or phrases such as "achieve," "building," "committed," "continue," "drive," "expect," "future," "guidance," "may," "model," "opportunities," "strategy," "target," "trends," and variations of such words and similar phrases. Various uncertainties and other factors could cause actual results to differ materially from those contained in the forward-looking statements. These include the specific risk factors identified in "Risk Factors" in our annual report on Form 10-K for our last fiscal year and any subsequent filings, as well as the following:
Kroger's ability to achieve sales, earnings, incremental FIFO operating profit, and adjusted free cash flow goals may be affected by: labor negotiations; potential work stoppages; changes in the unemployment rate; pressures in the labor market; changes in government-funded benefit programs; changes in the types and numbers of businesses that compete with Kroger; pricing and promotional activities of existing and new competitors, and the aggressiveness of that competition; Kroger's response to these actions; the state of the economy, including interest rates, the inflationary, disinflationary and/or deflationary trends and such trends in certain commodities, products and/or operating costs; the geopolitical environment including wars and conflicts; unstable political situations and social unrest; changes in tariffs; the effect that fuel costs have on consumer spending; volatility of fuel margins; manufacturing commodity costs; supply constraints; diesel fuel costs related to Kroger's logistics operations; trends in consumer spending; the extent to which Kroger's customers exercise caution in their purchasing in response to economic conditions; the uncertainty of economic growth or recession; stock repurchases; changes in the regulatory environment in which Kroger operates, along with changes in federal policy and at regulatory agencies; Kroger's ability to retain pharmacy sales from third party payors; consolidation in the healthcare industry, including pharmacy benefit managers; Kroger's ability to negotiate modifications to multi-employer pension plans; natural disasters or adverse weather conditions; the effect of public health crises or other significant catastrophic events; the potential costs and risks associated with potential cyber-attacks or data security breaches; the success of Kroger's future growth plans; the ability to execute our growth strategy and value creation model, including continued cost savings, growth of our alternative profit businesses, and our ability to better serve our customers and to generate customer loyalty and sustainable growth through our strategic pillars of fresh, our brands, personalization, and eCommerce; the outcome of litigation matters, including those relating to the terminated transaction with Albertsons; and the risks relating to or arising from our opioid litigation settlements, including the risk of litigation relating to persons, entities, or jurisdictions that do not participate in those settlements . Our ability to achieve these goals may also be affected by our ability to manage the factors identified above. Our ability to execute our financial strategy may be affected by our ability to generate cash flow.
Kroger's adjusted effective tax rate may differ from the expected rate due to changes in tax laws and policies, the status of pending items with various taxing authorities, and the deductibility of certain expenses.
Kroger assumes no obligation to update the information contained herein unless required by applicable law. Please refer to Kroger's reports and filings with the Securities and Exchange Commission for a further discussion of these risks and uncertainties.
Note: Kroger's quarterly conference call with investors will broadcast live at 10 a.m. (ET) on December 4, 2025 at ir.kroger.com. An on-demand replay of the webcast will be available at approximately 1 p.m. (ET) on Thursday, December 4, 2025.
3rd Quarter 2025 Tables Include:
Consolidated Statements of Operations
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
Supplemental Sales Information
Reconciliation of Net Total Debt and Net Earnings Attributable to The Kroger Co. to Adjusted EBITDA
Net Earnings Per Diluted Share Excluding the Adjustment Items
Operating Profit Excluding the Adjustment Items
Gross Margin
Table 1.
THE KROGER CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(unaudited)
THIRD QUARTER
YEAR-TO-DATE
2025
2024
2025
2024
SALES
$ 33,859
100.0 %
$ 33,634
100.0 %
$ 112,917
100.0 %
$ 112,815
100.0 %
OPERATING EXPENSES
MERCHANDISE COSTS, INCLUDING ADVERTISING,
WAREHOUSING AND TRANSPORTATION (a),
AND LIFO CHARGE (b)
25,957
76.7
25,948
77.2
86,638
76.7
87,332
77.4
OPERATING, GENERAL AND ADMINISTRATIVE (a)
8,467
25.0
5,898
17.5
22,358
19.8
19,388
17.2
RENT
194
0.6
203
0.6
667
0.6
672
0.6
DEPRECIATION AND AMORTIZATION
782
2.3
757
2.3
2,610
2.3
2,486
2.2
OPERATING PROFIT (LOSS)
(1,541)
(4.6)
828
2.5
644
0.6
2,937
2.6
OTHER INCOME (EXPENSE)
NET INTEREST EXPENSE
(146)
(0.4)
(86)
(0.3)
(490)
(0.4)
(294)
(0.3)
NON-SERVICE COMPONENT OF COMPANY-SPONSORED
PENSION PLAN (EXPENSE) BENEFITS
(2)
-
3
-
(6)
-
9
-
LOSS ON INVESTMENTS
(101)
(0.3)
(20)
(0.1)
(64)
(0.1)
(125)
(0.1)
GAIN ON SALE OF BUSINESS
-
-
79
0.2
-
-
79
0.1
NET EARNINGS (LOSS) BEFORE INCOME TAX EXPENSE
(1,790)
(5.3)
804
2.4
84
0.1
2,606
2.3
INCOME TAX EXPENSE (BENEFIT)
(475)
(1.4)
187
0.6
(79)
(0.1)
568
0.5
NET EARNINGS (LOSS) INCLUDING NONCONTROLLING INTERESTS
(1,315)
(3.9)
617
1.8
163
0.1
2,038
1.8
NET INCOME (LOSS) ATTRIBUTABLE TO
NONCONTROLLING INTERESTS
5
-
(1)
-
8
-
7
-
NET EARNINGS (LOSS) ATTRIBUTABLE TO THE KROGER CO.
$ (1,320)
(3.9) %
$ 618
1.8 %
$ 155
0.1 %
$ 2,031
1.8 %
NET EARNINGS (LOSS) ATTRIBUTABLE TO THE KROGER CO.
PER BASIC COMMON SHARE
$ (2.02)
$ 0.85
$ 0.23
$ 2.79
AVERAGE NUMBER OF COMMON SHARES USED IN
BASIC CALCULATION
655
723
659
722
NET EARNINGS (LOSS) ATTRIBUTABLE TO THE KROGER CO.
PER DILUTED COMMON SHARE
$ (2.02)
$ 0.84
$ 0.23
$ 2.77
AVERAGE NUMBER OF COMMON SHARES USED IN
DILUTED CALCULATION
655
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