Kroger Reports Solid Q1 2025 Results, Updates Guidance

CINCINNATI – June 20, 2025 – The Kroger Co. (NYSE: KR) today announced its financial results for the first quarter of fiscal year 2025, demonstrating continued operational strength and strategic progress. The company reported solid performance, highlighted by growth in key areas and an updated outlook for the remainder of the fiscal year.

First Quarter 2025 Highlights

Kroger's first quarter results underscore the resilience of its business model and the effectiveness of its strategic initiatives. Key financial and operational metrics for the quarter included:

• Identical Sales without Fuel: Increased by a robust 3.2%, indicating healthy underlying consumer demand and effective merchandising strategies across its store network.
• Operating Profit: Reported at $1,322 million.
• Earnings Per Share (EPS): Stood at $1.29.
• Adjusted FIFO Operating Profit: Reached $1,518 million, reflecting adjustments for certain items.
• Adjusted EPS: Came in at $1.49, providing a clearer picture of core profitability.
• eCommerce Sales: Experienced significant growth, increasing by 15%. This highlights the company's successful investment in its digital capabilities and omnichannel offerings, catering to evolving consumer shopping preferences.

Management Commentary

Ron Sargent, Chairman and CEO of Kroger, commented on the results, stating, "Kroger delivered solid first quarter results, with strong sales led by pharmacy, eCommerce and fresh. Our team's dedication to providing value and convenience to our customers continues to drive performance. We are pleased with the momentum in our business and remain focused on executing our strategic priorities to deliver sustainable growth and create shareholder value."

Updated 2025 Guidance

Based on the strong first-quarter performance and current market conditions, Kroger updated its identical sales without fuel guidance for the full fiscal year 2025. The revised guidance reflects the company's confidence in its ability to maintain sales momentum throughout the year.

Market Context and Implications

Kroger's performance in Q1 2025 comes amidst a dynamic retail environment characterized by shifting consumer spending patterns and ongoing inflationary pressures. The 3.2% identical sales growth without fuel is a positive indicator, suggesting that Kroger is effectively navigating these challenges through competitive pricing, a strong private-label portfolio, and enhanced customer experience. The significant 15% growth in eCommerce sales is particularly noteworthy, demonstrating Kroger's successful adaptation to the increasing demand for online grocery shopping. This growth positions Kroger favorably against competitors and strengthens its omnichannel presence.

The updated guidance suggests management's optimism regarding the company's ability to sustain its performance. Factors contributing to this outlook likely include continued strength in pharmacy sales, ongoing success in fresh departments, and the positive impact of digital investments.

Investment Insights

For investors, Kroger's Q1 2025 results offer several key takeaways:

• Sales Momentum: The identical sales growth indicates healthy underlying business performance, which is a positive sign for revenue stability.
• Digital Growth: The strong eCommerce growth is a crucial driver for future expansion and market share gains in the evolving grocery landscape.
• Profitability: Adjusted earnings provide a clearer view of core operational profitability, which appears solid.
• Guidance: The updated guidance suggests management's confidence, which can be a positive signal for future performance.

Investors should monitor Kroger's ability to manage costs in an inflationary environment and the competitive landscape, particularly the impact of discounters and online-only retailers. The company's strategic initiatives, including its partnership with Ocado and expansion of its digital ecosystem, will be key to watch for long-term growth potential.