Key Highlights

● Total sales were $34.6 billion, with identical sales excluding fuel up 0.2%.

● Adjusted EPS was $1.09, compared with $1.04 a year earlier.

● Full-year identical sales guidance was lowered to 0.2% to 0.8%.

● Kroger repurchased $1.0 billion of stock in the quarter.

Kroger (NYSE:KR) is among the very largest supermarket operators in the United States, serving more than 11 million customers daily through its stores and digital channels. Beyond conventional grocery, the group earns revenue from fuel, pharmacy, its private-label brands, eCommerce and a retail media business, Kroger Precision Marketing. The company is led by chief executive Greg Foran, with David Kennerley as chief financial officer.

Kroger sits in the consumer staples sector, in the food retail sub-industry. Its shares are listed on the New York Stock Exchange under the symbol KR.

Latest reported results

Kroger reported second-quarter 2026 results on September 11, 2026, for the quarter ended August 15, 2026. Total sales were $34.6 billion, compared with $33.9 billion a year earlier. Identical sales excluding fuel rose 0.2%, against 3.4% in the prior-year quarter, and the company said a 138 basis point headwind from the Inflation Reduction Act weighed on that figure.

Reported operating profit was $971 million, up from $863 million, and net earnings attributable to Kroger were $641 million, up from $609 million. Diluted earnings per share were $1.05 on a GAAP basis, compared with $0.91, while adjusted earnings per share were $1.09, compared with $1.04. Adjusted FIFO operating profit, which strips out certain items, was $1,076 million, slightly below the $1,091 million reported a year earlier, so the adjusted earnings per share gain owes much to a smaller share count: diluted shares were 608 million, against 665 million.

Adjusted eCommerce sales grew 20% and Kroger Precision Marketing profit rose 24%. Year-to-date operating cash flow was $3,085 million, down from $3,688 million, while capital expenditure rose to $2,437 million.

Guidance, capital return and balance sheet

Management lowered its full-year identical sales guidance, excluding fuel, to a range of 0.2% to 0.8%, from 1.0% to 2.0% set on June 18, 2026. The company reaffirmed every other measure: FIFO operating profit of $5.0 billion to $5.2 billion, adjusted earnings per share of $5.10 to $5.30, free cash flow of $2.7 billion to $2.9 billion and capital expenditure of $3.8 billion to $4.0 billion.

On shareholder returns, the board raised the quarterly dividend by 11% to $0.39 per share earlier in the quarter, the twentieth consecutive annual increase. Year-to-date dividends paid were $431 million, comfortably covered by operating cash flow of $3,085 million over the same period. Kroger repurchased $1.0 billion of stock in the quarter and has about $800 million remaining under a $2 billion authorization approved in December 2025, which it expects to complete by the end of fiscal 2026.

Net total debt was $15.5 billion, equal to 1.91 times adjusted EBITDA, below the company's stated target range of 2.30 to 2.50 times. Cash and temporary cash investments fell to $1.7 billion from $4.9 billion a year earlier, reflecting buybacks and investment spending.

Sales Momentum and Albertsons Merger Costs

The central question is whether sales momentum recovers. Identical sales growth has slowed sharply, and the lowered guidance range leaves little room for acceleration in the second half. Other risks the company flags include the lingering costs of the terminated Albertsons merger, with related litigation and settlement charges still appearing in the figures, opioid settlement obligations, transformation costs of $119 million so far this year, and a fulfillment network impairment that contributed a $2,497 million adjustment to rolling four-quarter earnings.

One confirmed event lies ahead: Kroger has scheduled an investor update meeting for October 20, 2026, which it says will cover strategic initiatives and longer-term financial targets.