Kroger forecasts modest 2026 growth as leadership transition continues

Core Viewpoint - Kroger has provided a modest outlook for 2026, aiming to stabilize operations under new CEO Greg Foran, with projected sales growth and earnings per share forecasts [1][6] Group 1: 2026 Outlook - Kroger expects identical sales excluding fuel to grow between 1% and 2% in 2026 [1] - The company forecasts earnings per share of $5.10 to $5.30 and free cash flow of $2.7 billion to $2.9 billion, with capital expenditure projected at $3.8 billion to $4 billion [1] Group 2: Recent Financial Performance - For the fourth quarter, Kroger reported sales of $34.72 billion, an increase from $34.30 billion a year earlier, with sales excluding fuel rising 2.1% year-on-year [2] - Operating profit rose to $1.24 billion from $912 million, and net earnings attributable to the company reached $861 million, compared to $634 million in the same quarter last year [3] - Gross margin for the quarter improved to 23.1% of sales, up from 22.7% a year earlier, supported by sourcing improvements and reduced supply chain costs [3] Group 3: Fiscal Year 2025 Results - For fiscal year 2025, total sales were reported at $147.64 billion, up from $147.12 billion in 2024, with a 3% year-on-year increase excluding fuel and Kroger Specialty Pharmacy [4] - Net earnings attributable to the company dropped to $1.01 billion from $2.66 billion a year earlier, and operating profit declined to $1.89 billion from $3.84 billion [4] Group 4: Impairment Charges and Share Repurchase - Results included $2.5 billion in impairment and related charges tied to its automated fulfillment network, representing a $2.91 loss per diluted share [5] - Kroger completed a $7.5 billion share repurchase program and authorized an additional $2 billion share repurchase program expected to be completed by the end of FY26 [5][6]