Kroger Q1 Sales Hit $46.12bn, EPS $1.58 Adjusted as Shares Plummet 10%
KR•Kroger’s Q1 FY26 sales rose to $46.12bn from $45.11bn, lifting net earnings to $903m and EPS to $1.46 ($1.58 adjusted) as e-commerce sales jumped 19%. Gross margin narrowed to 22.7% from 23%, triggering a 10% premarket share selloff despite reaffirmed FY26 guidance and a $2bn buyback plan.
1. Q1 Financial Results
Kroger posted Q1 FY26 sales of $46.12bn, up from $45.11bn year-on-year, with net earnings rising to $903m and diluted EPS to $1.46. Adjusted EPS increased to $1.58, driven by a 19% jump in e-commerce sales and a more-than-20% profit gain in Kroger Precision Marketing.
2. Margin Pressure and Market Reaction
Gross margin narrowed to 22.7% of sales from 23% a year earlier, weighed down by a heavier fuel mix, rising transportation costs and egg deflation. This margin squeeze spurred a 10% drop in premarket trading as investors reacted to squeezed profitability.
3. Guidance and Capital Allocation
Management reaffirmed full-year FY26 targets for 1%–2% identical-sales growth excluding fuel, EPS of $5.10–$5.30 and free cash flow of $2.7bn–$2.9bn. The board approved completing a $2bn share repurchase by end-FY26 while maintaining its investment-grade debt rating.
