Kroger Guidance Signals Slower Sales Growth
Kroger guidance points to modest sales and profit growth and may temper upside expectations as the new CEO focuses on price, fresh food and delivery.
KEY TAKEAWAYS
- FY2026 guidance targets identical sales excluding fuel of 1.0%–2.0% and adjusted FIFO operating profit of $5.0–$5.2 billion.
- Greg Foran is prioritizing lower prices, fresher assortments and faster delivery to regain market share.
- eCommerce topped $16.0 billion and grew 20% in Q4 while targeting about $400 million operating improvement.
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Kroger (KR) said in a press release on March 5, 2026, that Kroger guidance foresees only modest sales and profit growth for fiscal 2026 as its new CEO aims to grow share through lower prices, fresher assortments, and faster delivery.
Fourth-Quarter Results
Kroger reported fourth-quarter total sales of $34.7 billion, with identical sales excluding fuel rising 2.4%. Gross margin expanded to 23.1% from 22.7% a year earlier, driven by sourcing gains and lower supply-chain costs. eCommerce sales grew 20% in the quarter, surpassing $16 billion for fiscal 2025.
On a GAAP basis, Kroger posted fourth-quarter operating profit of $1.25 billion and GAAP earnings per share (EPS) of $1.35. Adjusted operating profit on a first-in, first-out (FIFO) inventory basis was $1.21 billion, with adjusted EPS of $1.28.
For the full year, identical sales excluding fuel increased 2.9%. Fiscal 2025 GAAP operating profit was $1.9 billion, including a $2.5 billion impairment related to the company’s automated fulfillment network. Adjusted FIFO operating profit totaled $4.9 billion, with adjusted EPS of $4.85.
Outlook, Strategy, and Capital Returns
Kroger guided fiscal 2026 identical sales excluding fuel growth of 1.0% to 2.0%, reflecting about a 130-basis-point headwind from the Inflation Reduction Act. The company projects adjusted FIFO operating profit between $5.0 billion and $5.2 billion, adjusted EPS of $5.10 to $5.30, and free cash flow of $2.7 billion to $2.9 billion.
Management expects first-quarter identical sales excluding fuel near the bottom of the fiscal range due to egg-price deflation. Kroger plans to scale its online operations, targeting about $400 million in operating-profit improvement in 2026 and a path to eCommerce profitability.
Greg Foran, who became CEO in February 2026, is focusing on competitive pricing, stronger fresh assortments, and faster delivery to regain market share. He said, "Kroger delivered a strong finish to the year, with improving market share trends and solid sales growth that reflect meaningful progress strengthening the business."
The board completed $7.5 billion in share repurchases, including $5.0 billion through an accelerated program and $2.5 billion in open-market purchases, and approved an additional $2.0 billion.
