Kroger's Q2 sales edge past estimates; cuts 2026 forecast amid regulatory headwinds
Kroger's Q2 sales edge past estimates; cuts 2026 forecast amid regulatory headwinds
Overview
U.S. grocery retailer's Q2 sales slightly beat analyst expectations, adjusted EPS rose 5% and beat
Identical sales without fuel grew 0.2% amid regulatory headwinds
Company repurchased $1 bln in shares during the quarter
Outlook
Kroger cuts 2026 identical sales without fuel growth forecast to 0.2%-0.8% from 1.0%-2.0%
Company maintains 2026 adjusted EPS guidance at $5.10-$5.30
Kroger reaffirms 2026 adjusted FIFO operating profit guidance at $5.0-$5.2 bln
Result Drivers
REGULATORY HEADWINDS - Co said identical sales growth was limited by an approximately 140 basis point unfavorable impact from the Inflation Reduction Act
ECOMMERCE AND MEDIA PROFITABILITY - Improvement in eCommerce and Kroger Precision Marketing profitability contributed to gross margin and profit growth
COST SAVINGS AND PHARMACY/FUEL PERFORMANCE - Adjusted EPS growth was driven by cost savings, strong pharmacy and fuel performance, and improved eCommerce profitability, per CFO David Kennerley
Company press release: ID:nPn4lnp2Ka
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Sales | Slight Beat* | $34.62 bln | $34.58 bln (15 Analysts) |
Q2 Adjusted EPS | Beat | $1.09 | $1.06 (19 Analysts) |
Q2 Identical Sales Growth Without Fuel |
| 0.2% |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 13 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the food retail & distribution peer group is "buy"
Wall Street's median 12-month price target for Kroger Co is $70.50, about 23.8% above its September 10 closing price of $56.95
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 12 three months ago
Reuters Recommended Reads
Sept 10 - Canadian grocer Empire Company's Q1 sales miss estimates
Sept 8 - United Natural Foods Q4 profit beats on cost cuts, productivity gains
Sept 10 - US holiday retail sales growth set to accelerate, Deloitte says
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)