Kroger(US:KR) Prnewswire·2025-09-11 12:00Core Insights - Kroger reported strong second quarter results for 2025, highlighting progress in organizational simplification, customer experience improvement, and value creation focus [2][12][13] Financial Performance - Identical sales without fuel increased by 3.4% compared to 1.2% in the same quarter last year [11][32] - Earnings per share (EPS) rose to $0.91 from $0.64 year-over-year, while adjusted EPS increased to $1.04 from $0.93 [2][11] - Operating profit reached $863 million, up from $815 million in the previous year [2][42] - Total company sales remained stable at $33.9 billion, with a 3.8% increase when excluding fuel and Kroger Specialty Pharmacy sales [3][11] Gross Margin and Profitability - Gross margin improved to 22.5% from 22.1% year-over-year, driven by lower supply chain costs and the sale of Kroger Specialty Pharmacy [4][5] - FIFO gross margin rate increased by 39 basis points, while the Operating, General and Administrative (OG&A) rate decreased by 5 basis points [5][6] Capital Allocation and Debt Management - Kroger plans to maintain strong free cash flow and continue investing in the business, with a commitment to increasing dividends over time [7] - The company entered a $5 billion accelerated share repurchase program, expected to be completed in fiscal third quarter 2025 [8] - 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 [9][33] Guidance Updates - Full-year 2025 guidance for identical sales without fuel has been raised to a range of 2.7% to 3.4% [10][13] - Operating profit guidance is now set at $4.8 to $4.9 billion, and EPS guidance is adjusted to $4.70 to $4.80 [10][13]