Overview

• U.S. grocery retailer's Q1 revenue rose, beating analyst expectations

• Adjusted EPS for Q1 slightly missed analyst expectations

• Identical sales without fuel grew 1.0%, reflecting slower growth

Outlook

• Kroger maintains 2026 guidance for identical sales without fuel at 1.0%-2.0%

• Company sees 2026 FIFO operating profit of $5.0-$5.2 bln

• Kroger expects 2026 EPS of $5.10-$5.30

Result Drivers

• MARGIN PRESSURE - Gross margin declined due to higher transportation costs, egg deflation, and planned price investments, partially offset by favorable pharmacy mix and improved eCommerce profitability

• LABOR INVESTMENT - OG&A rate increased mainly due to planned investments in associate wages and hours to enhance the customer experience

• DIGITAL GROWTH - Adjusted eCommerce sales grew 19% and Kroger Precision Marketing profit grew over 20%

Company press release: ID:nPn3lrdDpa

Key Details

Metric	Beat/Miss	Actual	Consensus Estimate
Q1 Sales	Beat	$46.12 bln	$45.47 bln (16 Analysts)
Q1 Adjusted EPS	Miss	$1.58	$1.59 (19 Analysts)

Analyst Coverage

• 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 $77.00, about 24.6% above its June 17 closing price of $61.82

• The stock recently traded at 11 times the next 12-month earnings vs. a P/E of 13 three months ago

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