Kroger Q4 EPS Up 9%, Identical Sales Grow 2.4% Despite 40-bp IRA Headwind
Kroger’s Q4 identical sales excluding fuel rose 2.4%, including a 40-basis-point Inflation Reduction Act headwind, and full-year identical sales excluding fuel grew 2.9% with adjusted EPS of $4.85, up 9%. E-commerce sales climbed 20% to $16 billion with profitability slated for 2026.
1. Q4 and Full-Year Sales and EPS
In Q4, Kroger reported identical sales excluding fuel rose 2.4%, with adjusted EPS of $1.28, up 12% year-over-year. For the full year, identical sales excluding fuel grew 2.9% and adjusted EPS reached $4.85, a 9% increase.
2. E-commerce Growth and Profitability
Adjusted e-commerce sales grew 20% in Q4 to $16 billion. Changes to the hybrid fulfillment model and profitable partnerships with DoorDash and Uber Eats are expected to drive e-commerce profitability in 2026, while convenience offerings aim to exceed $1.5 billion in sales next year.
3. Capital Allocation
Kroger generated $3.9 billion of adjusted free cash flow in 2025, exceeding expectations thanks to operating performance and working capital initiatives. The company completed its $7.5 billion share repurchase authorization, including a $5 billion accelerated program, and approved an additional $2 billion authorization to finish by fiscal 2026 end.
4. 2026 Guidance and IRA Impact
For fiscal 2026, Kroger expects identical sales excluding fuel growth of 1%–2%, or 2.3%–3.3% excluding a 130-basis-point headwind from the Inflation Reduction Act, which has no impact on gross profit dollars. Management plans increased price investments, cost savings measures, and focus on e-commerce and AI initiatives to support growth.