TL/DR –
Kroger reported a 2% YoY rise in total sales for Q3 2026 to $34.62bn, including a marginal increase in same-store sales around $30bn, and a decrease in adjusted net income from $695m to $667m. The supermarket giant’s gross margin of 22.4% remained mostly unchanged from the previous year’s quarter, with a rise in fuel sales offset by increased transportation costs. For full-year 2026, Kroger revised its projected identical sales growth down to 0.2% to 0.8% over 2025 due to expected drag on pharmacy sales from the 2022 Inflation Reduction Act, but maintained its adjusted EPS forecast of $5.10 to $5.30.
Quarterly Results Push Kroger’s Stock Upwards
Kroger (KR +2.70%) saw its stock edge up following the release of its latest quarterly figures prior to the market opening on Friday. The supermarket giant’s performance didn’t set the market alight, with only minor increases in key fundamentals and a slight beating of analyst profit predictions. However, there were some positive takeaways from the results that pleased supporters of the company.
Incremental Gains and Ongoing Changes
Quarterly sales for Kroger went up by 2% compared to the previous year, reaching just over $34.62 billion. This increase was helped along by a subtle rise in identical sales (excluding fuel) which fell slightly short of $30 billion. This figure was less impressive when compared to the 3.4% increase seen in the second quarter of 2025. The fluctuating price of fuel is often excluded from these calculations due to its unpredictable nature.
Net income that didn’t adhere to generally accepted accounting principles (non-GAAP, or adjusted) fell to $667 million from the $695 million profit seen in the previous year. However, due to a reduction in share count, Kroger’s adjusted per-share profit for the recent quarter was actually higher, at $1.09 compared to $1.04 in Q2 2025.
These headline figures were broadly in line with consensus analyst estimates. Analysts had predicted total sales of $34.65 billion and an adjusted net income of $1.06 per share for the retailer.
The quarter was characterized for Kroger by a combination of positive and negative elements that mostly balanced each other out, leading to only modest growth overall. In the absence of fuel sales, its sale of the Vitacost health and wellness e-commerce unit, and the closing of several fulfillment centers, sales would have risen by a mere 0.1%. The gross margin for the quarter (22.4%) remained largely unchanged from the previous year, with climbing fuel sales offset by rising transportation costs.
Ups and Downs in the Forecast
The company’s full-year 2026 guidance was a blend of good and bad news. Kroger anticipates a 0.2% to 0.8% rise in identical sales over 2025, reduced from the initially projected 1% to 2%. This adjustment is due to the expected negative impact of approximately 140 basis points on pharmacy sales as a result of the Inflation Reduction Act passed in 2022.
However, Kroger is holding onto its adjusted earnings per share (EPS) forecast of $5.10 to $5.30. This is a promising indication of a minimum of 5% growth year over year, aligning with the second quarter’s trailing rate. Such an increase would be a substantial achievement in the generally slow-growth, low-margin landscape of major retail.
The supermarket giant also plans to maintain and increase its quarterly dividend, having paid every quarter since reinstating the payout in mid-2006. Over the past 20 years, it has consistently announced annual dividend increases. The latest rise was a robust 11% increase to a new quarterly payout of $0.39 per share, offering an attractive yield of 2.5%, considerably above the average (under 1.1%) for all S&P 500 stocks.
In addition, Kroger intends to continue its regular share buybacks, aiming to spend the remaining approximately $800 million of this year’s $2 billion authorized by the board of directors.
Adequate Performance Amid Changing Trends
While the figures from the previous quarter aren’t particularly groundbreaking, Kroger’s 20% increase in e-commerce sales (an exact dollar amount wasn’t provided in the earnings release) demonstrates the company’s effective adaptation to modern shopping trends.
Kroger’s performance showcases its robust foundation as a large, relatively efficient supermarket chain operator with a vast customer base. Coupled with a stock that appeals to income investors due to its relatively high yield and management’s tendency to boost dividends, Kroger’s stock appears to be a secure and reassuring investment in these uncertain times.
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