The Kroger Co.

Kroger sells $147.1B a year and keeps just 2.2% as profit.

If you own KR, you should care that a 0.5-point margin slip can burn $735M.

kr

consumer large cap updated jan 9, 2026
$62.71
market cap ~$40B · 52-week range $44–$75
xvary composite: 59 / 100 · below average
our overall rating — combines growth, value, risk, and momentum
Start here if you're new
what it is
Kroger runs U.S. supermarkets, pickup, delivery, pharmacies, and fuel stations.
how it gets paid
Last year The Kroger made $147.1B in revenue. Grocery & pantry was the main engine at $73.6B, or 50% of sales.
why growth slowed
Revenue fell 1.9% last year. The 2.6% identical-sales gain mattered because a grocery chain with a 2.2% net margin cannot afford weak traffic.
what just happened
Kroger posted $1.22 a share on $34.7B in sales.
At a glance
B+ balance sheet — decent shape, but not bulletproof
90/100 earnings predictability — you can trust these numbers
13.1x trailing p/e — the market's not buying it — or you found a deal
2.4% dividend yield — cash in your pocket every quarter
15.5% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
Kroger runs U.S. supermarkets, pickup, delivery, pharmacies, and fuel stations.
You need food every week. Kroger has 2,725 stores and online ordering at 86% of them. Scale means fixed costs get spread across more baskets, so your grocery trip stays ordinary while the business keeps more of each dollar.
consumer large-cap grocery defensive dividend
How they make money
$147.1B annual revenue · their business grew -1.9% last year
Grocery & pantry
$73.6B
0.0%
Fresh food
$29.4B
0.0%
Pharmacy & health
$17.6B
2.6%
Fuel
$11.8B
1.9%
Digital pickup & delivery
$10.3B
17.0%
Private label manufacturing
$4.4B
0.0%
The products that matter
operates grocery and retail stores
Supermarkets & Multi-Department Stores
$147.1B revenue
it's the entire $147.1B business, and it still only converts that into a 2.1% net profit margin.
core engine
fulfills digital grocery orders
Digital Grocery
+17% growth
online sales grew 17% in the october quarter, but the segment also sat next to $2.0B in impairment and related e-commerce charges.
profitability watch
store-based delivery and pickup model
Fulfillment Reset
$400M target
management says the shift toward stores and third-party delivery should drive about $400M in profitability improvements and push digital operations into the black next fiscal year.
execution bet
Key numbers
$5.25
FY2026 EPS
That is the profit estimate per share. At $62.71, you are paying 13.1 times that number.
$153B
FY2026 revenue
This is the sales base. In a 2.2% margin business, a tiny change in cents per dollar adds up fast.
5.3%
Operating margin
This is the share of sales left after operating costs. A grocery chain lives or dies on a few tenths of a point.
15.5%
Return on capital
This is the profit return on money tied up in stores and trucks. Higher here means Kroger uses its assets better.
Financial health
B+
strength
  • balance sheet grade B+ — solid but not elite
  • risk rank 3 — safer than 50% of stocks
  • price stability 80 / 100
  • long-term debt $16.1B (29% of capital)
  • net profit margin 2.2% — keeps 2 cents of every dollar in revenue
  • return on equity 44% — $0.44 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market

You invested $10,000 in KR 3 years ago → it's now worth $15,020.

The index would have given you $13,920.

same period. same starting point. KR beat the market by $1,100.

source: institutional data · total return
What just happened
beat estimates
Kroger posted $1.22 a share on $34.7B in sales.
Identical sales excluding fuel rose 2.6%, and online purchases grew 17% in the October quarter. Gross margin widened by about 0.5 points, which is 50 basis points.
$34.7B
revenue
$1.22
eps
+0.5pts
gross margin
the number that mattered
The 2.6% identical-sales gain mattered because a grocery chain with a 2.2% net margin cannot afford weak traffic.
source: company earnings report, 2026

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What could go wrong

the #1 risk is e-commerce profitability after a $2.0B reset.

!
high
e-commerce profitability reset
Kroger took $2.0B in impairment and related charges tied to e-commerce operations. That tells you the old digital playbook was too expensive.
If the promised $400M in profitability improvements does not show up, the market will question the entire digital strategy.
∘
med
thin-margin grocery economics
A 2.1% net margin means Kroger does not have much cushion against price competition, labor pressure, or higher fulfillment costs.
Small operating misses can matter fast when you only keep about 2 cents of every revenue dollar.
∘
med
albertsons litigation over the failed merger
Kroger has filed counterclaims in its dispute with Albertsons. This is no longer about strategic upside. It is about legal drag and management attention.
Even without a deal, a long court fight can create cost, distraction, and headline risk.
~
low
balance sheet flexibility
The balance sheet is rated B+, with $16.1B in long-term debt and 29% of capital tied to debt. That's manageable, not carefree.
If operating pressure rises at the same time digital spending stays elevated, flexibility narrows.
A grocery retailer with a 2.1% net margin cannot afford repeated digital misfires. The e-commerce charge already showed what happens when execution slips.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
identical sales excluding fuel
The last print was 2.6%. In a 2.1% margin business, this is the operating heartbeat.
trend
digital profitability versus digital growth
Online sales grew 17%. That only matters if the $400M profitability target starts showing up in results.
risk
albertsons litigation updates
The merger is gone. The legal overhang is not. Watch for cost, timing, and any operational distraction.
calendar
fy2026 estimate revisions
The street is at $5.25 EPS and about $153B in revenue. Revisions will tell you whether the reset is working.
Analyst rankings
short-term outlook
average
momentum score 3. In human-speak, analysts do not see a strong near-term signal either way.
risk profile
average
stability score 3 — typical market risk for a large retailer. Safer than speculative stocks, less insulated than true staples leaders.
chart momentum
top 20%
technical score 2 — the stock's recent trading action has been stronger than most names in the coverage universe.
earnings predictability
90 / 100
Guidance has been reliable. You are buying consistency more than surprise upside.
source: institutional data
Institutional activity

institutions have been net buying for 3 consecutive quarters — 621 buyers vs. 615 sellers in 3q2025. total institutional holdings: 0.5B shares. net buying for 3 quarters.

source: institutional data · 1q2025-3q2025
source: institutional data
Price targets
3-5 year target range
$52 $97
$63 current price
$75 target midpoint · +20% from current · 3-5yr high: $110 (+75% · 17% ann'l return)
source: institutional data · analyst targets

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