Kroger reports second quarter sales of $34 billion and updates full year guidance

The Kroger Co. (KR) reported financial results Thursday for its second quarter ended August 15, 2026, posting total company sales of $34.6 billion compared to $33.9 billion for the same period a year earlier. The company said in a filing that it updated its full-year identical sales without fuel guidance range while reaffirming its adjusted net earnings per diluted share outlook.

Key takeaways

• Identical sales without fuel increased 0.2% for the second quarter.
• Operating profit reached $971 million, with diluted earnings per share of $1.05.
• Adjusted FIFO operating profit was $1,076 million and adjusted EPS was $1.09.
• Kroger repurchased $1.0 billion in shares during the quarter.

Second quarter results and margin metrics

Here's how the company did:

• Total sales were $34,621 million compared to $33,940 million a year earlier.
• Operating profit was $971 million compared to $863 million a year earlier.
• Net earnings attributable to The Kroger Co. were $641 million compared to $609 million a year earlier.
• Diluted earnings per share were $1.05 compared to $0.91 a year earlier.

Gross margin was 22.4% of sales for the second quarter compared to 22.5% for the same period last year. The LIFO charge for the quarter was $39 million, compared to a LIFO charge of $62 million for the same period last year. The Operating, General and Administrative rate, excluding fuel and adjustment items, increased 33 basis points compared to the same period last year, which the company attributed to planned investments in associate wages, increased health care costs, and sales deleverage, partially offset by lower incentive plan costs and ongoing productivity initiatives.

Guidance update

Given first half results and the macro environment, the company updated its identical sales without fuel guidance to a new range of 0.2% to 0.8%, which includes an approximately 140 basis point headwind from the Inflation Reduction Act. Kroger reaffirmed its full-year adjusted net earnings per diluted share guidance, reflecting confidence in cost savings, pharmacy and fuel performance, and eCommerce profitability.

"Kroger delivered a solid second quarter, with adjusted EPS growth of 5 percent," CEO Greg Foran said in a statement. "Our teams kept driving value for customers, improving execution in our stores, growing eCommerce profitably and managing costs with discipline."

Capital allocation and share repurchases

Earlier in the quarter, Kroger increased its dividend by 11% to $0.39 per common share, marking the 20th consecutive year of dividend increases. During the quarter, Kroger repurchased $1.0 billion in shares and year-to-date has repurchased $1.2 billion in shares under the $2 billion board authorization announced in December 2025. Approximately $800 million remains of the authorization at the end of the second quarter, and the company expects to complete remaining repurchases by the end of fiscal 2026.

Kroger's net total debt to adjusted EBITDA ratio was 1.91 at the end of the quarter, compared to 1.63 a year ago. The company stated its net total debt to adjusted EBITDA ratio target range is 2.30 to 2.50.

Why it matters

The update to identical sales guidance reflects broader consumer trends and cost pressures, including headwinds from the Inflation Reduction Act. Management's focus on cost discipline and eCommerce profitability supported adjusted earnings growth despite margin pressures from higher shrink and transportation costs.

By the numbers

What happens next

Kroger will host an investor update meeting on October 20, 2026, where additional details regarding strategic initiatives and longer-term financial targets will be shared. The company expects to complete the remaining share repurchases under its board authorization by the end of fiscal 2026.