Core Insights - The Kroger Co. has achieved a top score on the Disability Equality Index®, marking its recognition as a "Best Place to Work for Disability Inclusion" for the sixth consecutive year [1][2]. Company Commitment - Kroger emphasizes its commitment to creating a workplace where associates of all abilities can thrive and contribute meaningfully [2]. - The company has established an inclusive environment that empowers associates to be their authentic selves [2]. Disability Equality Index - The Disability Equality Index is a comprehensive tool that assesses disability inclusion across six key areas: Culture & Leadership, Enterprise-Wide Access, Employment Practices, Community Engagement, Supplier Inclusion, and Responsible Procurement [2]. - Companies that achieve a top score are recognized for their efforts in advancing disability inclusion practices [2][5]. Additional Recognitions - Kroger has received multiple accolades, including recognition for excellence in early career hiring, diversity, and trustworthiness from various organizations [3]. - The company is noted for its commitment to diversity and inclusion, further enhancing its reputation as a desirable workplace [3]. Company Overview - Kroger operates with over 400,000 associates serving over 11 million customers daily through various retail and eCommerce platforms [4]. - The company's mission is to "Feed the Human Spirit™" while promoting community initiatives like ZeroHungerZeroWaste [4]. Disability:IN - Disability:IN is a leading nonprofit resource that supports business disability inclusion globally, partnering with major companies to drive progress and deliver long-term business impact [7].

More than $100 in grocery savings available to Boost by Kroger Plus members during the two-week event; for a limited time renew or enroll at 50% off CINCINNATI, July 14, 2025 /PRNewswire/ -- The Kroger Co. (NYSE: KR) today announced the return of Boost Bonus Days, a mega-sales event giving Boost by Kroger Plus members exclusive access to even more benefits offered through their membership from July 16-July 29. "Boost by Kroger Plus offers members incredible savings every day, and those savings are about to ...

Core Viewpoint - The consumer staples sector is viewed as a safe investment during economic uncertainty, as it includes companies that produce essential goods that people need daily [1][5]. Group 1: Definition and Characteristics of Consumer Staples - Consumer staples stocks consist of companies that produce or sell basic goods, such as groceries and personal-care items [6]. - The Global Industry Classification Standard (GICS) categorizes the Consumer Staples sector as including food and staples retail, food and beverage production, and household and personal product manufacturing [7]. - These stocks are considered defensive, generating stable revenues and producing significant free cash flow, often returned to shareholders as dividends [8]. Group 2: Investment Rationale - Investors are drawn to consumer staples stocks because they provide a steady demand for necessities, making them less sensitive to economic fluctuations [8]. - Historical performance shows that consumer staples outperformed the S&P 500 during major downturns, such as the Great Recession and the COVID-19 crash [10]. - Despite their defensive nature, consumer staples may have limited growth potential during economic expansions, as demand for basic goods does not significantly increase [11]. Group 3: Identifying Quality Consumer Staples Stocks - A quality screen for consumer staples stocks includes criteria such as being part of the S&P Composite 1500, having a long-term estimated earnings-per-share growth rate of at least 5%, and having at least five covering analysts [12][13][14]. - Stocks should also have a consensus Buy rating of 2.5 or less and a dividend yield of at least 1.5% to ensure they provide better income than the S&P 500 [15][16]. Group 4: Recommended Consumer Staples Stocks - The following companies are highlighted as strong consumer staples stocks based on the outlined criteria: - Dollar General (DG): Long-term EPS growth of 6.5%, consensus rating of 2.39, dividend yield of 2.1% [16] - Tyson Foods (TSN): Long-term EPS growth of 19.6%, consensus rating of 2.29, dividend yield of 3.5% [16] - Kroger (KR): Long-term EPS growth of 6.1%, consensus rating of 2.16, dividend yield of 1.8% [16] - Sysco (SYY): Long-term EPS growth of 6.1%, consensus rating of 2.10, dividend yield of 2.6% [16] - Keurig Dr Pepper (KDP): Long-term EPS growth of 7.2%, consensus rating of 1.91, dividend yield of 2.7% [16] - Philip Morris International (PM): Long-term EPS growth of 11.4%, consensus rating of 1.88, dividend yield of 3.0% [16] - Coca-Cola (KO): Long-term EPS growth of 6.1%, consensus rating of 1.62, dividend yield of 2.9% [16]

Core Insights - Kroger is focusing on making summer meal planning affordable for families by offering a grocery haul that provides five kid-friendly lunches for under $50, translating to less than $2 per person [1][3] - The company has lowered prices on thousands of grocery staples, emphasizing value and savings for customers during the summer season [1][4] - Kroger's commitment to quality is highlighted through its Fresh & Quality Guarantees, ensuring customers do not have to compromise on quality for lower prices [4] Pricing and Promotions - Kroger is promoting a variety of summer meal options, including turkey pinwheels, cheese quesadillas, and grilled cheese, with prices for these items being very competitive, such as $2.29 for peanut butter and 79 cents for macaroni and cheese [8] - The company is simplifying promotions and offering bulk packages, which allows families to stock up on favorite items while saving money [4] Customer Engagement - Kroger aims to enhance customer experience by providing meal solutions that allow families to spend more time together rather than focusing on shopping [3] - The grocery chain is also promoting a wide selection of summer treats, including ice cream, at prices starting as low as $2.79, further appealing to families during the summer [4]

Company Overview - Kroger Co. operates in the thin-margin grocery industry and is undergoing a significant transformation in product offerings and shopping preferences [11] - The company is focusing on plant-based products and technological expansion, including the acquisition of meal kit company Home Chef and a partnership with British online grocery delivery firm Ocado [11] - Kroger has introduced grocery delivery service Kroger Ship and has partnered with driverless car company Nuro to enhance its online ordering and home delivery capabilities [11] Investment Insights - Kroger is currently rated 3 (Hold) on the Zacks Rank, with a VGM Score of A, indicating a solid overall performance [12] - The Momentum Style Score for Kroger is B, with shares having increased by 4.7% over the past four weeks [12] - Three analysts have revised their earnings estimates higher for fiscal 2026, with the Zacks Consensus Estimate increasing by $0.02 to $4.76 per share, and Kroger has an average earnings surprise of 1.4% [12][13]

Core Insights - The Zacks Retail – Supermarkets industry is experiencing challenges due to persistent inflation and changing consumer spending habits, which are impacting revenue growth [1][5] - Leading supermarket retailers are focusing on omnichannel strategies to enhance competitiveness and drive long-term growth [2][6] Industry Overview - The industry encompasses various supermarket retailers offering a wide range of products, including groceries, health and beauty aids, and household items, operating through multiple formats [3] - E-commerce has significantly transformed the industry, with retailers enhancing pickup and delivery services to meet rising consumer preferences for online shopping [3] Major Trends - Rising operational costs, including store renovations and wage increases, are squeezing profitability for supermarket players [4] - Economic conditions, such as inflation and geopolitical tensions, are reshaping consumer behavior, leading to a preference for budget-friendly products [5] - Supermarket retailers are investing in digital transformation and omnichannel strategies to improve customer experience and operational efficiency [6] Industry Performance - The Zacks Retail – Supermarkets industry currently ranks 179, placing it in the bottom 27% of over 250 Zacks industries, indicating dull near-term prospects [7][8] - The industry has outperformed the S&P 500, with a growth of 44% over the past year compared to the S&P 500's 12.5% [10] Current Valuation - The industry is trading at a forward 12-month price-to-earnings (P/E) ratio of 32.93X, significantly higher than the S&P 500's 22.43X and the sector's 17.42X [13] Company Highlights - Walmart Inc. is leveraging a diversified business model and strong omnichannel strategy, with a consensus EPS estimate of $2.59 for the current fiscal year and a share price increase of 44.2% over the past year [15][16] - The Kroger Co. is focusing on digital transformation and customer-centric approaches, with a recent EPS estimate increase to $4.76 and a share price rise of 41.3% in the past year [19][20]

Sales Performance - Kroger reported first quarter sales of $45,118 million, a slight decrease of 0.3% compared to $45,269 million in the same period last year[84]. - Total sales decreased by 0.3% in Q1 2025 compared to Q1 2024, primarily due to a 12.5% decrease in supermarket fuel sales and the sale of Kroger Specialty Pharmacy[99]. - Total sales to retail customers without fuel increased by 1.1% to $40,401 million in Q1 2025, compared to $39,967 million in Q1 2024[100]. - Identical sales excluding fuel increased by 3.2% in the first quarter of 2025, compared to a 0.5% increase in the first quarter of 2024[84]. - Identical sales, excluding fuel, increased by 3.2% in Q1 2025, with total sales reaching $39,766 million compared to $38,535 million in Q1 2024[103]. eCommerce Growth - eCommerce sales grew by 15% in the first quarter of 2025, driven by strong demand for delivery solutions[88]. - eCommerce sales grew by 15% in Q1 2025, driven by a 20% increase in Delivery solutions[100]. Profitability - Operating profit for the first quarter was $1,322 million, representing a 2.2% increase from $1,294 million in the first quarter of 2024[84]. - Operating profit for Q1 2025 was $1.3 billion, or 2.93% of sales, an increase of 7 basis points from Q1 2024[116]. - FIFO operating profit was $1.4 billion, or 3.02% of sales, reflecting a 3 basis point increase compared to Q1 2024[117]. - Gross margin improved to 23.0% in Q1 2025 from 22.0% in Q1 2024, attributed to the sale of Kroger Specialty Pharmacy and lower supply chain costs[106]. Earnings - Adjusted net earnings attributable to Kroger per diluted common share were $1.49, a 4.2% increase compared to $1.43 in the first quarter of 2024[84]. - The net earnings attributable to The Kroger Co. excluding adjusted items was $996 million in Q1 2025, a decrease of 4.9% from $1,047 million in Q1 2024[97]. - Adjusted net earnings per diluted share increased by 4.2% to $1.49 in Q1 2025, compared to $1.43 in Q1 2024[97]. - Adjusted net earnings per diluted share for Q1 2025 were $1.49, a 4.2% increase from $1.43 in Q1 2024[123]. Cash Flow and Investments - Cash flows from operations decreased by 8% to $2.1 billion compared to the first quarter of 2024[88]. - Net cash provided by operating activities decreased to $2.1 billion in Q1 2025 from $2.3 billion in Q1 2024[126]. - Capital investments totaled $1.2 billion for both Q1 2025 and Q1 2024, with 27 supermarkets opened or remodeled[130]. Debt and Financial Management - Kroger is committed to maintaining a net total debt to adjusted EBITDA ratio target range of 2.30 to 2.50[79]. - Total debt remained consistent at $17.9 billion as of May 24, 2025, compared to the fiscal year-end 2024[133]. - As of May 24, 2025, the company held cash and temporary cash investments of $4.7 billion, reflecting strong operational performance[138]. Shareholder Returns - The company returned $392 million to shareholders through share repurchases and dividend payments in the first quarter[88]. - The company expects total shareholder return within a target range of 8% to 11% over time[80]. Expenses and Charges - Operating, General and Administrative (OG&A) expenses as a percentage of sales increased to 17.6% in Q1 2025 from 16.8% in Q1 2024, influenced by decreased fuel sales and increased healthcare costs[111]. - Charges related to merger costs amounted to $175 million in Q1 2025, impacting OG&A expenses significantly[99]. - The company recorded a net charge of $44 million for labor dispute charges in Q1 2025[99]. - Net interest expense rose to $199 million in Q1 2025 from $123 million in Q1 2024, primarily due to increased average total outstanding debt[120]. - The effective income tax rate increased to 21.3% in Q1 2025 from 19.8% in Q1 2024, influenced by state income taxes and tax credits[121].

Core Insights - Kroger Co. has announced a 9% increase in its quarterly cash dividend, reflecting confidence in long-term prospects and a commitment to delivering stable returns to investors [1][10] - The annual dividend will rise from $1.28 to $1.40 per share, with the next payment of 35 cents per share scheduled for September 1, 2025 [2][10] - This marks the 19th consecutive year of dividend increases since its reinstatement in 2006, with a compounded annual growth rate of 13% over this period [3][10] Financial Performance - The company expects adjusted free cash flow between $2.8 billion and $3 billion for fiscal 2025, supporting growth and dividend payouts [4][10] - Kroger's stock has gained 6.8% over the past three months, compared to the industry's growth of 13.8% [9] - The forward 12-month price-to-sales ratio for Kroger is 0.31X, indicating a lower valuation compared to the industry average of 1.06X [11] Earnings Estimates - The Zacks Consensus Estimate for Kroger's current financial-year sales implies a year-over-year growth of 1.1%, while earnings per share are expected to grow by 6.5% [12] - For the current quarter, the sales estimate is $34.10 billion, with a year-over-year growth estimate of 0.56% [13] - The earnings per share estimate for the current quarter is $1.01, reflecting an 8.6% year-over-year growth [14]

Financial Data and Key Metrics Changes - The company reported a strong first quarter with significant identical sales growth driven by pharmacy, ecommerce, and fresh categories [34] - A dividend increase from $1.28 to $1.40 per year was approved, marking the 19th consecutive year of dividend increases [38] Business Line Data and Key Metrics Changes - The ecommerce segment experienced double-digit growth, indicating a successful strategy in online sales [54] - The company plans to complete 30 store projects in 2025, maintaining the same level as the previous year, with intentions to increase this number in 2026 and beyond [54] Market Data and Key Metrics Changes - The company lowered prices on over 2,000 additional products in the first quarter, aiming to make savings more visible to customers [52] - The competitive pricing environment remains rational, with a focus on keeping prices affordable to attract more customers [51] Company Strategy and Development Direction - The company is focusing on core retail business investments, including lower prices and extended store hours, funded by reducing corporate expenses [34] - A strategic reevaluation of non-core assets is underway to enhance focus on the primary business [33] Management's Comments on Operating Environment and Future Outlook - Management emphasized the need to adapt quickly to competition, particularly in ecommerce, to improve profitability and customer base [35] - The company is committed to investing in associates, having increased average store hourly pay by 38% over the past seven years [36] Other Important Information - The company has donated over 3.4 billion meals through its Zero Hunger, Zero Waste plan, showcasing its commitment to community support [38] - The board of directors expressed confidence in the company's strategy through the approved dividend increase [39] Q&A Session Summary Question: Update on the CEO search - The board has a search committee in place working with a recognized search firm, while the current CEO remains committed to leading during the transition [48] Question: Raising employee wages in line with cost of living - The company has invested $2.4 billion in wages since 2018, resulting in a 38% increase in average hourly store wages [49] Question: Pricing strategies in a competitive environment - The company is focused on lowering prices to attract customers, having reduced prices on over 2,000 products in the first quarter [52] Question: Store plans and future growth - The company is on track to complete 30 store projects in 2025 and plans to close approximately 60 underperforming stores, reallocating resources to new store growth [55] Question: Approach to customer health data requests - The company prioritizes customer trust and has a team ensuring compliance with data protection laws [56] Question: Justification of executive pay ratios - Compensation is based on various factors, and the company continues to invest in associates' wages and benefits [58] Question: Board's stance on supporting farm workers - The company believes its existing standards for suppliers make the shareholder proposal unnecessary [60] Question: Impact of proposed changes to SNAP on sales - The company is prepared to navigate changes to the SNAP program without expecting a significant impact on sales [61] Question: Alignment of waste reduction vision with cigarette waste proposal - The company views the cigarette waste proposal as redundant given its existing waste reduction commitments [63] Question: Thoughts on changing tariff situations - The company is monitoring tariff changes and is prepared to manage any potential cost impacts [65]

Core Viewpoint - The Kroger Co. has announced a dividend increase from $1.28 to $1.40 per year, reflecting the company's strong operating performance and commitment to shareholder value [1][3]. Dividend Growth - The quarterly dividend has experienced a compounded annual growth rate of 13% since its reinstatement in 2006, marking the 19th consecutive year of dividend increases [2]. Capital Allocation Strategy - Kroger's capital allocation strategy focuses on utilizing free cash flow to invest in business growth while maintaining an investment-grade debt rating and returning capital to shareholders [4]. Company Overview - Kroger operates with nearly 410,000 associates serving over 11 million customers daily through various eCommerce and store experiences, aiming to create ZeroHungerZeroWaste communities [5].