Kroger(US:KR)2025-09-11 12:14Sales Performance - Identical sales without fuel increased by 3.4% in Q2 2025 compared to 1.2% in Q2 2024[3] - Total company sales were $33.9 billion, unchanged from the same period last year, but excluding fuel and Kroger Specialty Pharmacy, sales increased by 3.8%[6] - eCommerce sales grew by 16% in the second quarter[5] - Total sales for Q2 2025 reached $33,940 million, a slight increase from $33,912 million in Q2 2024[26] - Excluding fuel, the second quarter sales for 2025 reached $30,019 million, a 3.4% increase from $29,019 million in 2024[40] - Year-to-date sales excluding fuel for 2025 were $69,785 million, compared to $67,554 million in 2024, reflecting a growth of 3.3%[40] - Year-to-date sales for 2025 reached $79,058 million, a slight decrease from $79,181 million in the same period of 2024[58] Financial Performance - Operating profit reached $863 million, with adjusted EPS of $1.04, up from $0.93 in the previous year[5] - Operating profit for Q2 2025 was $863 million, compared to $815 million in Q2 2024, reflecting a 5.9% increase[26] - Net earnings attributable to The Kroger Co. for Q2 2025 were $609 million, up from $466 million in Q2 2024, representing a 30.6% increase[26] - Adjusted FIFO operating profit for the year-to-date 2025 was $2,610 million, compared to $2,483 million in 2024, reflecting a 5.1% increase[55] - Net earnings per diluted share for the second quarter of 2025 were $0.91, compared to $0.64 in 2024, representing a 42.2% increase[47] - Gross profit for Q2 2025 was $7,646 million, compared to $7,499 million in Q2 2024, reflecting an increase of 1.97%[58] - Year-to-date gross profit increased to $18,002 million in 2025, compared to $17,440 million in 2024, marking a growth of 3.22%[58] Margins and Costs - Gross margin improved to 22.5% from 22.1% year-over-year, primarily due to lower supply chain costs and the sale of Kroger Specialty Pharmacy[7] - The company reported a FIFO gross margin of 23.0% for Q2 2025, compared to 22.6% in Q2 2024[30] - Year-to-date gross margin improved to 22.8% in 2025 from 22.0% in 2024[58] - Merchandise costs, including advertising and warehousing, were $26,130 million in Q2 2025, down from $26,261 million in Q2 2024[58] - Rent expenses decreased to $13 million in Q2 2025 from $17 million in Q2 2024[58] - Depreciation and amortization increased to $151 million in Q2 2025 from $135 million in Q2 2024[58] Debt and Shareholder Returns - Kroger's net total debt to adjusted EBITDA ratio increased to 1.63 from 1.24 a year ago, with a target range of 2.30 to 2.50[12] - The company is committed to a $5 billion accelerated share repurchase program, expected to be completed in Q3 2025[11] - Kroger expects to maintain its quarterly dividend and increase it over time, subject to board approval[10] - The total common shares outstanding at the end of the period decreased to 662 million in 2025 from 723 million in 2024[33] - Total debt rose to $17,959 million in 2025, up from $12,230 million in 2024, an increase of $5,729 million[43] - The current portion of long-term debt increased to $827 million in 2025 from $196 million in 2024, a change of $631 million[43] Guidance and Future Outlook - The company raised its full-year guidance for identical sales without fuel to a range of 2.7% to 3.4%[16] - Adjusted FIFO operating profit guidance was increased to $4.8 to $4.9 billion for FY25[16] - The company continues to focus on operational effectiveness by evaluating rent and depreciation in its gross margin calculations[56]