The Kroger Co. Reports Q2 2026 Results and Updates FY26 Identical Sales Guidance

Executive Summary

On September 11, 2026, The Kroger Co. (NYSE: KR) filed a Form 8-K/A to furnish its second-quarter 2026 financial results and update its full-year 2026 guidance.

Second Quarter 2026 Highlights

• Total Sales: $34.6 billion compared to $33.9 billion in Q2 2025 (up 0.1% excluding fuel, Vitacost sale, and fulfillment center exits).
• Identical Sales (without fuel): Increased 0.2%, including an unfavorable 138 basis points impact from the Inflation Reduction Act.
• Profitability:
  • Operating profit reached $971 million, compared to $863 million in Q2 2025.
  • Adjusted FIFO operating profit was $1,076 million vs. $1,091 million in the prior-year period.
  • Diluted EPS rose to $1.05 (up from $0.91), while Adjusted EPS grew 5% to $1.09 (up from $1.04).
• Digital & Media Growth: Adjusted eCommerce sales grew +20%, and Kroger Precision Marketing profit rose +24%.
• Margins: Gross margin was 22.4% of sales; FIFO gross margin rate (excluding rent, D&A, and fuel) expanded by 13 basis points.

Capital Allocation & Balance Sheet

• Share Repurchases: Kroger repurchased $1.0 billion in common stock during Q2 ($1.2 billion year-to-date) under its $2.0 billion board authorization, leaving approximately $800 million remaining to be completed in fiscal 2026.
• Dividends: Dividend was increased by 11% earlier in the quarter, marking 20 consecutive years of dividend growth.
• Leverage: Net total debt to adjusted EBITDA ratio was 1.91x (below the target range of 2.30x to 2.50x).

Updated Full-Year 2026 Guidance

• Identical Sales (ex-fuel): Lowered to 0.2% – 0.8% (from prior 1.0% – 2.0%), reflecting first-half trends and macro environment headwinds (~140 bps headwind from IRA).
• Adjusted FIFO Operating Profit: Reaffirmed at $5.0 – $5.2 billion.
• Adjusted EPS: Reaffirmed at $5.10 – $5.30.
• Free Cash Flow: Maintained at $2.7 – $2.9 billion.
• Capital Expenditures: Maintained at $3.8 – $4.0 billion.