$KR · KROGER CO

Kroger reported Q2 FY2026 results: total sales of $34.6B (+2.0% YoY), GAAP EPS of $1.05 vs $0.91, and adjusted EPS of $1.09 vs $1.04. Identical sales without fuel grew just 0.2% (vs 3.4% a year ago), pressured by a 138 bps Inflation Reduction Act headwind. Full-year ID sales guidance was cut to 0.2%-0.8% from 1.0%-2.0%, while FIFO operating profit ($5.0-$5.2B) and EPS ($5.10-$5.30) guidance were reaffirmed.

Extended-hours trading shows shares down 2.53% to $55.51 vs the $56.95 regular close, indicating the market is penalizing the sharp guidance cut on same-store sales despite reaffirmed profit targets.

A same-store sales guide cut of this magnitude at a $35B grocery giant signals real consumer-demand softening, even as management leans on buybacks and cost discipline to protect earnings.

Kroger's ID sales deceleration mirrors broader grocery-sector pressure from moderating food inflation and a more value-conscious consumer. The reaffirmed profit outlook despite weaker top-line growth highlights cost-discipline levers (eCommerce profitability, media, sourcing) that peers are also
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Identical sales growth nearly stalled at 0.2% (vs 3.4% prior year), with the Inflation Reduction Act creating a 138 bps headwind. The lowered full-year ID sales guidance of 0.2%-0.8% signals management expects continued softness. Higher shrink, transportation costs, and associate wage investments er