Kroger posted higher first-quarter earnings and revenue for fiscal 2026 (FY26), reaffirming its full-year outlook across key financial targets.
The US grocer recorded total sales of $46.12bn in the quarter ended on 23 May 2026, up from $45.11bn a year earlier.
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Excluding fuel and online health and wellness retailer Vitacost, sales edged up 0.5% year-on-year (YoY) while identical sales excluding fuel rose 1%.
Net earnings attributable to Kroger climbed to $903m from $866m in the prior-year period, with operating profit advancing to $1.40bn from $1.32bn.
Diluted earnings per share (EPS) rose to $1.46 from $1.29 while adjusted EPS moved up to $1.58 from $1.49.
Adjusted e-commerce sales expanded 19% during the quarter, and Kroger Precision Marketing profit grew by more than 20%.
Gross margin narrowed to 22.7% of sales from 23% a year earlier, weighed down by higher fuel sales, increased transportation costs, egg deflation and planned price investments.
Partly offsetting these pressures were a favourable pharmacy mix, improved e-commerce profitability, sourcing benefits and lower depreciation.
The operating, general and administrative rate, excluding fuel and adjustment items, rose 16 basis points, driven by planned wage and hours investments, partially offset by reduced pension-related costs and productivity measures.
On capital allocation, Kroger said it intends to maintain its investment-grade debt rating and continue paying quarterly dividends while generating strong free cash flow.
A $2bn share repurchase authorisation approved by the board in December 2025 is expected to be completed by the end of FY26.
For the full year, Kroger held its guidance steady, projecting identical sales excluding fuel growth of 1% to 2%, EPS of $5.1 to $5.3, free cash flow of $2.7bn to $2.9bn, capital expenditure of $3.8bn to $4bn and a tax rate of 23%.
Kroger CEO Greg Foran said: “We serve millions of families every day, in our stores and online. We have the right stores in the right places, unmatched customer insights, and the ability to win. Our focus is clear: to become America’s best grocer. We will measure ourselves against that every day.
“We are pleased with our first quarter results, but we know there is more work to do. That is why we are building a culture that is never satisfied, with a constant focus on serving our customers better.”
