Sep 11, 2026 earnings call — Focus on value, ecommerce, and cost savings
Kroger delivered adjusted EPS of $1.09 and lowered full-year identical sales without fuel to 0.2%–0.8%.
Revenue $34.6B (est $34.6B) · EPS $1.09 (est $1.06)
Key quotes
"We can fund it, and really, this quarter is a demonstration of that even though we have seen that the consumer has been pretty disciplined in terms of how they have spent"
"adjusted ecommerce sales grew 20% and combined with the continued strength of retail media, we delivered our second consecutive quarter of profitable ecommerce growth."
"Cost savings remain a core pillar of our long term strategy. They are how we fund investments in customer value, while protecting the long term earnings power of the business."
Analyst Q&A 12
price investments and impact
Q (Michael Lasser · UBS): How much did Kroger invest in price in Q2, where do Kroger's price gaps stand, and what has been the impact of those price investments?
A: Management said they can fund price investments from savings and showed this quarter as a demonstration. They have invested geographically and improved pricing on basic private-label shelf prices. They are monitoring market share weekly and maintained their gap to the rest of market through Q2.
"We were pleased with the FIFO gross margin performance this quarter." — David John Christopher Kennerley (CFO)
inflation outlook and impact
Q (Robert Ohmes · BofA): What is Kroger's view on inflation pressures for grocery, and what is the inflation assumption for the industry in the back half?
A: Management said inflation pressure may mount and they saw more pressure in Q2 than Q1. They are taking a measured approach while working on cost savings and expect to remain below CPI while keeping FIFO gross margins positive.
"So, you know, our range is within this 1 to 2.5 range for the balance of the year." — David John Christopher Kennerley (CFO)
pricing strategy and timeline
Q (Edward Kelly · Wells Fargo): How will Kroger simplify pricing, balance fewer deals vs better shelf price, and how will customers respond to the change?
A: Management said this is a multiyear program and cannot be done quickly. They generate savings from COGS, imports and efficiency, apply them to shelf prices by geography, and use a promotional mix while measuring unit sales and customer engagement over time.
"This is a multiyear program." — Gregory S. Foran (CEO)
changing customer perception of price
Q (John Heinbockel · Guggenheim): How big is the gap between price perception and reality, and how do you change perception versus reality?
A: Management said perception takes time to catch up to reality; initial price cuts can lower sales but over time customers learn and add items to baskets. They use marketing and store execution to shift perception and expect measurable improvement within a year and more after that.
"I would say to you that over time, my experience has been that perception does equal reality." — Gregory S. Foran (CEO)
drivers of comp deceleration and market share
Q (Kelly Bania · BMO): Can you reconcile the pharmacy headwinds, Cyclospora impact, and the core grocery comp ex pharmacy; how do fresh vs nonfresh affect market share?
A: Management quantified several headwinds: the Inflation Reduction Act reduced ID sales, brand-to-generic shifts hurt sales, eggs impacted IDs, and Cyclospora hit produce. Despite these, they widened and maintained their gap to Circana's rest of market, and are encouraged by category-by-category market share performance.
"So the inflation reduction act, obviously, you know, we would been pretty clear that would have an impact was a 140-basis-point impact to ID sales in the quarter." — David John Christopher Kennerley (CFO)
fuel margin outlook
Q (Leah Jordan · Goldman Sachs): What is baked into guidance for fuel margins in the back half, how much of a tailwind was fuel versus plan, and how to think about lapping it next year?
A: Management said gallons were up slightly and profit per gallon was up slightly in Q2, so total fuel profit was low single digit profit growth. They have baked in that fuel margins will be softer in H2 versus H1 and expect volatility in the fuel business.
"As we built into our guidance for the balance of the year, we are expecting and we have baked into that fuel margins will be softer than H1, and that is what we have got in the outlook." — David John Christopher Kennerley (CFO)
tradeoff profit vs investment
Q (Simeon Gutman · Morgan Stanley): How do you reconcile weaker sales but held profit during the turnaround and the tradeoff between protecting near-term profits and investing to gain market share?
A: Management said the consumer is disciplined, which creates opportunities if you have a clear plan and team. They see more opportunities than expected after 200 days and believe they can find savings (shrink, out of stocks, goods not for resale, COGS) to fund investments while executing the plan.
"I actually think that is to our advantage at the moment." — Gregory S. Foran (CEO)
gross margin drivers and tariff refunds
Q (Tom Palmer · JPMorgan): Rank the importance of e-comm profit, pharmacy sourcing, tariff refunds and other items for gross margin expansion, and quantify the tariff refund impact.
A: Management said FIFO gross improved and the model is take cost out, invest in value, and grow margins over time; e-comm, media, pharmacy mix and sourcing savings all helped while shrink and fuel transportation were headwinds. Tariff refunds were modest and treated as neutral because any refund would be reinvested.
"And the way we think about that is if we get tariffs, we will spend it." — David John Christopher Kennerley (CFO)
traffic and ticket drivers
Q (Evercore): You said traffic was positive in the quarter; can you unpack the change and was ticket down due to mix or inflation?
A: Management confirmed traffic was up slightly while ticket was down. They cited disciplined customers, SNAP and gas impacts, and fewer items per basket; where they ran the value proposition they saw customers add extra items.
"We did have traffic up slightly." — Gregory S. Foran (CEO)
categories gaining share and diesel cost
Q (Krisztina Katai · Deutsche Bank): Which category characteristics are driving dollar and unit share gains (merchandising vs price), and what diesel/freight cost assumption is in the back half?
A: Management said items tied to health, organic and clear value (prepared foods, deli, private brands) are performing well and merchandising plus value are both important. They also said they assumed incremental diesel and freight headwinds in H2 but still expect positive FIFO gross margin growth in the balance of the year.
"Anything sort of that has to do with health, organic, etcetera, works." — Gregory S. Foran (CEO)
store growth vs M&A strategy
Q (Rupesh Parikh · Oppenheimer): Post-Giant Eagle, how will Kroger balance organic store growth and M&A, and does the weaker backdrop change store growth aggressiveness?
A: Management said opening more stores is a clear element of strategy, including new stores and major remodels in high-growth and existing geographies to take share. On M&A they will evaluate opportunities like Giant Eagle but remain disciplined on capital allocation and returns.
"You know, you know, it is gonna be a clear element of our strategy going forward, which is to open more stores." — David John Christopher Kennerley (CFO)
supplier negotiations and toolbox
Q (Scott Marks · Jefferies): How are negotiations with suppliers going when suppliers want to raise prices, and what levers does Kroger have to maintain customer value?
A: Management said they have multiple levers including an expanded private-brand portfolio to give customers lower-price choices. They value supplier relationships but will require justification for price increases and will represent the consumer when negotiating.
"Our job is to be the customer's agent." — Gregory S. Foran (CEO)