The Kroger Co. (KR) Reports Q4 Revenue of $34.7B, Gross Margin Improves to 23.1%

Core Viewpoint - The Kroger Co. (NYSE:KR) is highlighted as a top-performing consumer staples stock, with recent financial results indicating growth in revenue and improvements in gross margin [1][2]. Financial Performance - For the fourth quarter of 2025, Kroger reported total revenue of $34.7 billion, an increase from $34.3 billion in the previous year, reflecting a 2.1% sales increase when excluding gasoline [2][3]. - The gross margin improved from 22.7% to 23.1%, driven by factors such as sourcing efficiency, lower supply chain expenses, and increased fuel margins, although this was partially offset by price investments and a lower-margin mix from pharmaceutical sales [2][3]. - For the entire fiscal year 2025, total company sales reached $147.6 billion, up 3.0% from $147.1 billion in 2024, with gross margin increasing from 22.3% to 22.9% due to similar operational improvements [4]. Operational Insights - The FIFO gross margin rate remained stable year-over-year, while LIFO charges decreased significantly from $30 million to $11 million [3]. - The Operating, General, and Administrative (OG&A) rate increased by 21 basis points, primarily due to labor expenditures and real estate gains from the previous year [3]. - Despite a rise in LIFO charges to $157 million, FIFO margin improved by 44 basis points, indicating productivity gains that partially offset the increase in OG&A [4]. Company Overview - Kroger is one of the largest grocery retailers in the U.S., operating a diverse range of stores including supermarkets and convenience stores, and focuses on food, pharmacy, and household products, with an emphasis on private-label brands and digital shopping [5].