Kroger Q2 Profit Rises, Backs FY26 Adj. Earnings View, Cuts Sales Growth Forecast; Stock Drops

(RTTNews) - Supermarket chain Kroger Co. reported Friday higher profit and sales in its second quarter, while Identical Sales growth was slower than the prior year. Further, the firm maintained adjusted earnings outlook for fiscal 2026, but trimmed growth view for identical sales without fuel.

In the pre-market activity on the NYSE, the shares were losing around 2.62 percent, trading at $55.47, after closing Thursday's regular trading 0.90 percent higher.

CFO David Kennerley stated, "Given our first half results and the macro environment, we are updating our identical sales without fuel guidance to a new range of 0.2 percent to 0.8 percent, which includes an approximately 140 basis point headwind from the Inflation Reduction Act. We are reaffirming our adjusted FIFO net operating profit and adjusted earnings per diluted share guidance, reflecting our confidence and visibility into the same factors that drove our profitability in the second quarter."

Looking ahead for fiscal 2026, the company continues to expect adjusted net earnings per share of $5.10 to $5.30, and adjusted FIFO Operating Profit of $5.0 billion to $5.2 billion.

Meanwhile, identical sales without fuel is now projected to grow 0.2 percent to 0.8 percent, lower than previously expected growth of 1.0 percent to 2.0 percent.

In the second quarter, Kroger's net earnings attributable totaled $641 million or $1.05 per share, higher than $609 million or $0.91 per share last year.

Adjusted earnings were $667 million or $1.09 per share for the period, compared to $1.04 per share a year ago.

Adjusted earnings per share grew 5 percent, driven by cost savings, strong pharmacy and fuel performance, and improvement in the profitability of eCommerce business.

Operating profit was $971 million, higher than prior year's $863 million. Adjusted FIFO operating profit, meanwhile, edged down to $1.076 billion from $1.091 billion last year.

The company's sales for the period rose 2.0 percent to $34.621 billion from $33.940 billion last year. Excluding fuel, the sale of Vitacost and the exit of certain fulfillment centers, sales increased 0.1 percent compared to the same period last year.

Identical Sales without fuel increased 0.2 percent, compared to 3.4 percent growth in the prior year. Adjusted eCommerce sales grew 20 percent.

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