CINCINNATI, OH - The Kroger Co. reported its fourth quarter and fiscal year 2025 results, provided 2026 guidance, and shared progress on key priorities.
In Kroger’s recent release, the retailer emphasized that its growth strategy is built around its pillars of fresh, brands, personalization, and eCommerce.
Comments from CEO Greg Foran
"Kroger delivered a strong finish to the year, with improving market share trends and solid sales growth that reflect meaningful progress in strengthening the business.
We have the right foundation in place, and I'm focused on making it even stronger by delivering more value to customers, improving the customer experience in stores and online, and driving cost savings and productivity to fund our growth."
Fourth Quarter Financial Results
Total company sales were $34.7 billion in the fourth quarter compared to $34.3 billion for the same period last year. Excluding fuel, sales increased 2.1% compared to the same period last year.
Gross margin was 23.1% of sales for the fourth quarter compared to 22.7% for the same period last year. The result was primarily attributable to sourcing improvements, lower supply chain costs, better fuel margins, decreased depreciation, and lower shrink, partially offset by price investments and the mix effect from growth in pharmacy sales, which has lower margins.
The FIFO gross margin rate, excluding rent, depreciation and amortization, and fuel, was flat compared to the same period last year. The result was primarily attributable to sourcing improvements, lower supply chain costs, and lower shrink offset by price investments and the mix effect from growth in pharmacy sales, which has lower margins.
The LIFO charge for the quarter was $11 million, compared to a LIFO charge of $30 million for the same period last year.
The Operating, General and Administrative rate, excluding fuel and adjustment items, increased 21 basis points compared to the same period last year. The increase in rate was primarily attributable to cycling real estate gains from a year ago and labor investments to improve the customer experience, partially offset by lower incentive plan costs and improved productivity.
Fiscal 2025 Financial Results
Total company sales were $147.6 billion in 2025 compared to $147.1 billion in 2024, which included $2.0 billion from Kroger Specialty Pharmacy sales. Excluding fuel and Kroger Specialty Pharmacy in both periods, sales increased 3.0% compared to last year.
Gross margin was 22.9% of sales for 2025 compared to 22.3% last year. The improvement in rate was primarily attributable to the sale of Kroger Specialty Pharmacy, sourcing improvements, lower fuel sales, lower shrink, and lower supply chain costs partially offset by the mix effect from growth in pharmacy sales, which has lower margins, and price investments.
Comments from CFO David Kennerley
"For 2026, we expect identical sales without fuel growth of 1.0% to 2.0%, adjusted FIFO operating profit of $5.0 to $5.2 billion, and adjusted EPS of $5.10 to $5.30. Our identical sales without fuel guidance include an approximately 130 basis point headwind from the Inflation Reduction Act.
This guidance reflects our ability to invest more aggressively in value for customers while improving gross margins, funded by eCommerce reaching profitability, meaningful procurement efficiencies, and productivity gains across the business."
See the full release here.
