Kroger Reports Third Quarter 2025 Results and Updates Guidance for 2025

Core Insights - Kroger reported strong third quarter results for 2025, with a focus on strategic priorities and eCommerce growth, expecting profitability in its eCommerce segment by 2026 [2][3]. Financial Performance - Total sales for Q3 2025 were $33.9 billion, up from $33.6 billion in Q3 2024, with a 2.6% increase in identical sales excluding fuel [4][13]. - The company experienced an operating loss of $1.541 billion, compared to an operating profit of $828 million in the same quarter last year [3][13]. - Adjusted earnings per share (EPS) for Q3 2025 were $1.05, up from $0.98 in Q3 2024 [3][13]. - Gross margin improved to 22.8% from 22.4% year-over-year, driven by the sale of Kroger Specialty Pharmacy and lower supply chain costs [5][6]. Strategic Initiatives - Kroger completed a strategic review aimed at enhancing its eCommerce business, which saw a 17% increase in sales [2][13]. - The company made an accelerated contribution to multi-employer pension plans, which increased operating expenses but aimed to stabilize future benefits for associates [8]. Capital Allocation and Debt Management - Kroger is committed to generating strong free cash flow and maintaining its investment-grade debt rating, with plans to continue paying dividends and executing share repurchases [9][10]. - The net total debt to adjusted EBITDA ratio increased to 1.73 from 1.21 year-over-year, indicating a focus on managing leverage while investing in growth [11][32]. Guidance and Outlook - For full-year 2025, Kroger narrowed its guidance for identical sales without fuel to a range of 2.8% to 3.0% and raised the lower end of its adjusted EPS guidance to $4.75 to $4.80 [12][15].