Kroger Reports Third Quarter 2025 Results and Updates Guidance for 2025
The Kroger Co. recently released its third quarter 2025 results, providing a comprehensive overview of its financial performance, strategic initiatives, and future outlook. The report highlights key financial metrics, operational achievements, and management's perspective on the company's progress and future direction.
Financial Highlights
For the third quarter of 2025, Kroger reported total sales of $33.9 billion, a slight increase from $33.6 billion in the same period last year. Identical sales without fuel rose by 2.6%. However, the company faced an operating loss of $(1,541) million, primarily due to a $2.6 billion impairment charge related to its automated fulfillment network. This resulted in an EPS of $(2.02). Adjusted EPS, excluding the impairment charge, was $1.05, up from $0.98 in the third quarter of 2024.
Business and Operational Highlights
Kroger's eCommerce sales saw a significant increase of 17%, reflecting the company's strategic focus on expanding its online presence. The gross margin improved to 22.8% from 22.4% in the previous year, driven by the sale of Kroger Specialty Pharmacy, better performance of *Our Brands*, lower supply chain costs, and reduced shrink. The FIFO gross margin rate also increased by 49 basis points.
Strategic Initiatives and Corporate Developments
During the third quarter, Kroger completed a $5 billion accelerated share repurchase program, part of its $7.5 billion share repurchase authorization. The company plans to execute open market share repurchases under the remaining $2.5 billion authorization by the end of fiscal 2025. Additionally, Kroger made an accelerated contribution to multi-employer pension plans, which increased the quarter's Operating, General and Administrative rate by 8 basis points.
Management's Perspective
Chairman and CEO Ron Sargent commented, "Kroger delivered another quarter of strong results reflecting meaningful progress on our strategic priorities. Our eCommerce business posted another quarter of impressive performance. We have now completed our strategic review which we expect will make our eCommerce business profitable in 2026. We continue to focus on what matters most – serving our customers, running great stores, and strengthening our core business."
Future Outlook
Looking ahead, Kroger has updated its full-year 2025 guidance. The company now expects identical sales without fuel to grow between 2.8% and 3.0%, slightly narrowing the previous range. The EPS guidance has been adjusted to $4.75 - $4.80, up from the previous lower end of $4.70. Free cash flow is projected to remain between $2.8 billion and $3.0 billion, with capital expenditures expected to be in the range of $3.6 billion to $3.8 billion.
Original SEC Filing: KROGER CO [ KR ] - 8-K - Dec. 04, 2025