Kroger's Q2 sales edge past estimates; cuts 2026 forecast amid regulatory headwinds
KR•What drove the quarter
Kroger said identical sales growth was limited by an approximately 140 basis point unfavorable impact from the Inflation Reduction Act.
Improvement in eCommerce and Kroger Precision Marketing profitability contributed to gross margin and profit growth.
Adjusted EPS growth was driven by cost savings, strong pharmacy and fuel performance, and improved eCommerce profitability, according to CFO David Kennerley.
Key figures and analyst view
| Metric | Beat/Miss | Actual | Consensus Estimate |
|---|---|---|---|
| Q2 Sales | Slight Beat* | $34.62 billion | $34.58 billion (15 analysts) |
| Q2 Adjusted EPS | Beat | $1.09 | $1.06 (19 analysts) |
| Q2 Identical Sales Growth Without Fuel | 0.2% |
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 12 "strong buy" or "buy", 13 "hold" and no "sell" or "strong sell".
The average consensus recommendation for the food retail & distribution peer group is "buy".
Wall Street's median 12-month price target for Kroger Co is $70.50, about 23.8% above its Sept. 10 closing price of $56.95.
The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 12 three months ago.
Q2 sales and earnings beat estimates
Kroger's second-quarter sales slightly beat analyst expectations, adjusted EPS rose 5% and beat, and identical sales without fuel grew 0.2% amid regulatory headwinds.
