Kroger Company (NYSE:KR) shares rose on Thursday after the grocer delivered a profit beat and pointed to stronger margins driven by sourcing gains and easing supply-chain costs.
Management also reaffirmed its focus on steady core sales growth and disciplined spending as it outlined its outlook for the new fiscal year.
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Quarterly Metrics
The company reported fourth-quarter adjusted earnings per share of $1.28, beating the analyst consensus estimate of $1.20.
Quarterly sales of $34.725 billion missed the Street view of $35.064 billion. Excluding fuel, sales increased 2.1% compared to the same period last year.
The LIFO charge for the quarter was $11 million, compared to a LIFO charge of $30 million for the same period last year.
Quarterly operating profit increased to $1.246 billion, compared with $912 million a year ago.
In the quarter under review, Gross Margin expanded to 23.1% from 22.7% a year ago. The result was primarily attributable to sourcing improvements, lower supply chain costs, better fuel margins, decreased depreciation and lower shrink.
Outlook
Kroger sees fiscal 2026 adjusted EPS of $5.10 to $5.30, versus the $5.29 estimate.
Kroger expects fiscal 2026 identical sales without fuel to rise 1% to 2%.
The company forecasts FIFO operating profit of $5.0 billion to $5.2 billion.
Kroger sees free cash flow of $2.7 billion to $2.9 billion and capital spending of $3.8 billion to $4.0 billion, with a tax rate of 23%.
KR Price Action: Kroger shares are trading higher by 4.01% to $70.71 at publication on Thursday.
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